-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UN4BtU/WZFVwJ6rceTESAvuobmNVZEU24ZWxpko7IIJhuWedkBDE4YpT0SbGFIJL tqPoTKiLMxrhm+kgWnxiSA== 0000950142-05-001000.txt : 20050324 0000950142-05-001000.hdr.sgml : 20050324 20050324104044 ACCESSION NUMBER: 0000950142-05-001000 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050317 ITEM INFORMATION: Bankruptcy or Receivership ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050324 DATE AS OF CHANGE: 20050324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENN TRAFFIC CO CENTRAL INDEX KEY: 0000077155 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 250716800 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09930 FILM NUMBER: 05700603 BUSINESS ADDRESS: STREET 1: 1200 STATE FAIR BLVD CITY: SRYACUSE STATE: NY ZIP: 13221-4737 BUSINESS PHONE: 8145369900 MAIL ADDRESS: STREET 1: 1200 STATE FAIR BLVD CITY: SYRACUSE STATE: NY ZIP: 13221-4737 8-K 1 form8k_032205.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) MARCH 17, 2005 ------------------------------ THE PENN TRAFFIC COMPANY - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) DELAWARE - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 001-9930 25-0716800 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 1200 STATE FAIR BOULEVARD SYRACUSE, NEW YORK 13221-4737 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (315) 453-7284 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (SEE General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP As previously reported, on May 30, 2003 (the "Petition Date"), The Penn Traffic Company (the "Company") and its subsidiaries (collectively, the "Debtors") each filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code, 11 U.S.C. Sections 101-1330, as amended (the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") (collectively the "Chapter 11 Cases"). During the Chapter 11 Cases, the Debtors have continued to operate their businesses and manage their properties as debtors-in-possession. On December 23, 2004, the Debtors filed with the Bankruptcy Court the First Amended Joint Plan of Reorganization of The Penn Traffic Company and Its Affiliated Debtors and Debtors in Possession Under Chapter 11 of the Bankruptcy Code, which was amended on February 4, 2005 (as so amended, the "Plan") and the related Disclosure Statement, which was amended on February 4, 2005, copies of which are included as Exhibits 2.1 and 2.2, respectively, hereto. On March 16, 2005, the Debtors filed certain technical modifications to the Plan, a copy of which are attached hereto as Exhibit 2.3. Capitalized terms used herein and not otherwise defined have the meaning set forth in the Plan, as so modified. On March 17, 2005, the Bankruptcy Court entered its Findings of Fact and Conclusions of Law Re: Order and Judgment Confirming the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors-in-Possession Under Chapter 11 of Title 11 of the United States Code, dated February 4, 2005, a copy of which is attached hereto as Exhibit 2.4, and an Order and Judgment Confirming The First Amended Joint Plan of Reorganization of The Penn Traffic Company and Its Affiliated Debtors and Debtors-In-Possession Under Chapter 11 of Title 11 of the United States Code, dated February 4, 2005, and Granting Related Relief (the "Confirmation Order"), a copy of which is attached hereto as Exhibit 2.5. On March 17, 2005, Penn Traffic issued a press release relating to the confirmation of the Plan, a copy of which was included as Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on March 18, 2005 and which is incorporated by reference herein. Although the Bankruptcy Court entered the Confirmation Order on March 17, 2005, the Plan has not yet been consummated and, therefore, is not yet effective. The Plan and the Confirmation Order contain certain conditions precedent to the occurrence of the Effective Date of the Plan, unless waived in accordance with the Plan. The Debtors anticipate that the Effective Date of the Plan will occur by the end of March 2005; however, the Company can make no assurances as to when, or ultimately if, the Plan will become effective. It is also possible that additional technical amendments could be made to the Plan prior to effectiveness. Set forth below is a summary of certain material provisions of the Plan that is qualified in its entirety by reference to the Plan itself. Among other things, as described below, the Plan will result in the cancellation of the Company's common stock issued prior to the Petition Date, and the holders of such common stock will receive no distribution under the Plan. The Reorganized Company will issue New Penn Traffic Common Shares in accordance with the terms of the Plan. The number of New Penn Traffic Common Shares that will be issued will be the greater of (i) 10,000,000 and (ii) that number of shares determined by multiplying 10,000,000 by a fraction, the numerator of which is equal to the aggregate amount of Class 3 Claims that are Allowed Claims under the Plan as of the Final Distribution Date and the denominator of which is equal to 110% of the total amount of Class 3 Claims that are Allowed Claims under the Plan as of the Final Distribution Date. In addition, up to 10% of the aggregate number of shares New Penn Traffic Common Shares may be issued pursuant to a management incentive program, the terms of which have yet to be determined. To effectuate the terms of the Plan, on the Effective Date, Reorganized Penn Traffic will enter into a $164,000,000 principal amount exit financing facility consisting of a term loan of $6,000,000, a revolver of $130,000,000 and a supplemental real estate facility of $28,000,000. In addition, Reorganized Penn Traffic will consummate a sale-leaseback transaction pursuant to which it will sell its five owned distribution centers located in New York and Pennsylvania to Equity Industrial Partners Corp. for $37,000,000 and Equity Industrial will lease the distribution centers back to Reorganized Penn Traffic for an initial term of 15 years, with four consecutive five year options to renew the lease (except that the lease term will end no later than the 14th anniversary of the initial term with respect to the Pennsylvania distribution centers). SUMMARY OF DISTRIBUTIONS TO BE MADE PURSUANT TO THE PLAN -------------------------------------------------------- DESCRIPTION TREATMENT ----------- --------- Administrative Claims- Paid in full in Cash (i) at the sole General option of the Debtors (before the Effective Date) or the Reorganized Debtors (on or after the Effective Date) (a) in the ordinary course of business as such Claim becomes due and owing or (b) on the Initial Distribution Date or (ii) on such other date as the Bankruptcy Court may order. Administrative Claims - Subject to Section 2.1.(F) of the Plan, PBGC Allowed PBGC will be paid $3.5 million Administrative Claim bi-annually over a period of two years in four equal installments commencing on the date that is six months following the Effective Date of the Plan, and such PBGC Allowed Administrative Claim will be secured by a Post-Effective Date Trade Lien. Administrative Claims - PJSC Subject to Sections 2.1.(D) and 6.4.(A) Reorganization Fee of the Plan, PJSC will be paid a Reorganization Fee of $2,250,000.00 LESS the aggregate amount of monthly advisory fees paid to PJSC as of the Effective Date (at $100,000.00 per month). Administrative Claims - KZCS Subject to Bankruptcy Court approval, Success Fee KZCS will be paid a Success Fee as follows: (i) $2.75 million upon entry of an approval order of the Bankruptcy Court; (ii) $1 million when the "aggregate unsecured creditor recovery" ("AUCR," as defined below) exceeds 25%; and (iii) $1.25 million when the AUCR exceeds 30%. AUCR means the 30 day average daily closing trading price of the New Penn Traffic Common Shares, MULTIPLIED BY the 30 day average of the number of New Penn Traffic Common Shares issued and outstanding, DIVIDED BY the 30 day average of the aggregate amount of Allowed Class 3 Claims. Such calculation will be performed after the Effective Date daily beginning on the 120th day after public trading of the New Penn Traffic Common Shares commences, and shall continue through the 485th day thereafter. Administrative Claims -Demme Upon the Initial Distribution Date, Mr. Success Bonus James A. Demme will be paid a Success Bonus based on the percentage recoveries on Allowed Unsecured Claims as follows: (x) for recoveries up to 10%, the Success Bonus will be $250,000.00; and (y) for each additional 1% of recoveries above 10%, the Success Bonus will be increased by an additional $20,000.00. Priority Tax Claims At the Reorganized Debtors' option, (i) paid in Cash equal to the amount of such Claim on the Initial Distribution Date, or (ii) paid in Cash in six equal annual installments, together with interest thereon at the legal rate required for such Claims in chapter 11 cases, which interest will be paid annually in arrears pursuant to Section 1129(a)(9)(C) of the Code. DIP Facility Claims Paid in full, in Cash, or otherwise satisfied in a manner acceptable to the DIP Lenders. Post-Petition Trade Lien Claims Paid in full, in Cash, on the date on which, in the ordinary course of business, such Allowed Trade Lien Claim becomes due and owing. If the Reorganized Debtors implement a Post-Effective Date Trade Lien Program, then each holder of an Allowed Trade Lien Claim will also share pari passu in any Post-Effective Date Trade Lien on the terms and conditions described in Section 5.17. of the Plan. Priority Non-Tax Claims Paid in full in Cash on the later of the Initial Distribution Date and a date that is as soon as practicable after the date upon which such Priority Non-Tax Claim becomes an Allowed Priority Non-Tax Claim. Other Secured Claims At the sole option of the Debtors, (i) paid in full in Cash on the Initial Distribution Date, (ii) reinstated according to the terms of the relevant instrument, (iii) paid on such other terms as the Debtors and the holder of such Claim may agree, or (iv) satisfied through the surrender by the applicable Debtor of the collateral securing the Claim to the holder thereof. Each of the Blairsville Property Claim and the Clarion Property Claim will be Allowed Class 2 "Other Secured Claims" under the Plan. Notwithstanding anything contained in the Plan to the contrary, pursuant to and in accordance with the terms of Section 1124(2) of the Bankruptcy Code, the Blairsville Property Mortgage Documents and the Clarion Property Mortgage Documents will be reinstated and reaffirmed in accordance with their terms as provided in Section 2.7.(C)(ii) of the Plan, and such agreements will continue in full force and effect following the Effective Date. Unsecured Claims Each holder of an Allowed Unsecured Claim will receive (i) its PRO RATA share of 100% of the New Penn Traffic Common Shares, subject to dilution resulting from the issuance of additional New Penn Traffic Common Shares upon the exercise of options to purchase New Penn Traffic Common Shares granted to management of Reorganized Penn Traffic pursuant to the Management Stock Incentive Program and (ii) its PRO RATA share of all Trust Recoveries, if any. Convenience Claims Claims in the amount of $5,000.00 or less will be allowed as Convenience Claims in the amount filed or scheduled, and Claims voluntarily reduced to $5,000.00 by Ballot election will be allowed as Convenience Claims in the amount of $5,000.00. Each holder of an Allowed Convenience Claim will receive Cash equal to 15% of its Allowed Claim; PROVIDED, HOWEVER, that a holder of more than one Allowed Convenience Claim, which Claims in the aggregate exceed $5,000.00, may elect to be treated with respect to and in the amount of such aggregated Claim, as a Class 3 Claimholder for distribution purposes only. Intercompany Claims Intercompany Claims will be discharged, and the holders of Intercompany Claims will not be entitled to receive or retain any property on account of such Claims; PROVIDED, HOWEVER, that prior to discharge the Debtors have the right to retain or effect such transfers and set offs with respect to Intercompany Claims as they deem appropriate for accounting, tax and commercial business purposes, to the fullest extent permitted by applicable law. Common Stock Claims and Interests Interests will be cancelled, and the holders of Common Stock Claims and Interests will not be entitled to receive or retain any property on account of such Claims and Interests. The following is the most recent unaudited consolidatd balance sheet for the period commencing December 1, 2004 and ended December 25, 2004 filed by the Company with the Bankruptcy Court as part of its monthly operating report. THE PENN TRAFFIC COMPANY CONSOLIDATED BALANCE SHEET AS OF 12/25/04 (IN THOUSANDS OF DOLLARS) CURRENT ASSETS: Cash and short-term investments $ 28,111 Accounts and notes receivable - net 42,272 Inventory - net 119,882 Prepaid inventories 4,045 Prepaid expenses and other current assets 5,918 Assets held for sale 3,140 ---------- Total Current Assets 203,368 NONCURRENT ASSETS: Capital leases - net 14,266 Property, plant & equipment 168,929 Beneficial leases - net 18,437 Other assets and deferred charges - net 1,866 ---------- Total Non-Current Assets 203,498 ---------- TOTAL ASSETS $ 406,866 ========== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Current portion of long-term debt $ 205 Debtor-in-Possession Revolver 32,163 Post-petition payables 43,796 Accrued wages and other current liabilities 27,363 Accrued interest expense 214 Payroll taxes and other taxes payable 3,640 ---------- Total Current Liabilities 107,381 Liabilities subject to compromise 412,911 TOTAL LIABILITIES 520,292 STOCKHOLDERS' DEFICIT (113,426) ---------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 406,866 ========== ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) The following are attached as exhibits to this Current Report on Form 8-K: EXHIBIT DESCRIPTION ------- ----------- 2.1 First Amended Joint Plan of Reorganization Plan of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession, dated February 4, 2005. 2.2 First Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code with Respect to the First Amended Joint Reorganization Plan of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005. 2.3 Notice of Technical Modifications to the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005. 2.4 Findings of Fact and Conclusions of Law Re: Order and Judgment Confirming the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005. 2.5 Order and Judgment Confirming First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005 and Granting Related Relief. 99.1 Press Release issued by The Penn Traffic Company on March 17, 2005 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by The Penn Traffic Company on March 18, 2005). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized. THE PENN TRAFFIC COMPANY By: /s/ Francis D. Price, Jr. ---------------------------- Name: Francis D. Price, Jr. Title: Vice President Dated: March 23, 2005 EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 2.1 First Amended Joint Plan of Reorganization Plan of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession, dated February 4, 2005. 2.2 First Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code with Respect to the First Amended Joint Reorganization Plan of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005. 2.3 Notice of Technical Modifications to the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005. 2.4 Findings of Fact and Conclusions of Law Re: Order and Judgment Confirming the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005. 2.5 Order and Judgment Confirming First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005 and Granting Related Relief. 99.1 Press Release issued by The Penn Traffic Company on March 17, 2005 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by The Penn Traffic Company on March 18, 2005). EX-2 2 ex2-1form8k_032205.txt EXHIBIT 2.1 EXHIBIT 2.1 ----------- Kelley A. Cornish (KC/0754) Elizabeth R. McColm (EM/8532) Ross B. Rosenfelt (RR/1911) PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK - ---------------------------------------------- Chapter 11 In re Case No. 03-22945 (ASH) THE PENN TRAFFIC COMPANY, ET AL., (Jointly Administered) Debtors. - ---------------------------------------------- FIRST AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE Dated: February 4, 2005 TABLE OF CONTENTS PAGE INTRODUCTION ..................................................................1 ARTICLE I - DEFINITIONS AND INTERPRETATION.....................................2 A. Definitions...........................................................2 B. Interpretation.......................................................12 C. Computation of Time..................................................13 ARTICLE II - CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS......................................................13 A. Unclassified Claims..................................................13 2.1. Administrative Claims..........................................13 2.2. Senior Note Trustee Claim......................................14 2.3. Priority Tax Claims............................................14 2.4. DIP Facility Claim.............................................14 2.5. Post-Petition Trade Lien Claims................................14 B. Classified Claims and Interests......................................15 2.6. Class 1 -- Priority Non-Tax Claims.............................15 2.7. Class 2 -- Other Secured Claims................................15 2.8. Class 3 -- Unsecured Claims....................................16 2.9. Class 4 -- Convenience Claims..................................16 2.10. Class 5 -- Intercompany Claims.................................17 2.11. Class 6 -- Common Stock Claims and Interests...................17 ARTICLE III - TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.......................................................17 3.1. Rejected Contracts and Leases..................................17 3.2. Assumed Contracts and Leases...................................17 3.3. Miscellaneous..................................................18 3.4. Payments Related to Assumption of Executory Contracts and Unexpired Leases.............................................18 3.5. Post-Petition Contracts and Leases.............................19 3.6. Rejection Damages Bar Date.....................................19 ARTICLE IV - CONDITIONS PRECEDENT.............................................19 4.1. Conditions to Occurrence of Effective Date.....................19 4.2. Waiver of Conditions to Consummation...........................19 4.3. Non-Consensual Confirmation....................................19 ARTICLE V - IMPLEMENTATION OF PLAN............................................20 5.1. Pre-Effective Date Management and Operation of Debtors.........20 5.2. Post-Effective Date Committee; Dissolution of Committee........20 5.3. Pre-Effective Date Injunctions or Stays........................21 i PAGE 5.4. Merger of Certain Debtors......................................21 5.5. Amended Certificates of Incorporation and Amended Bylaws.......21 5.6. Post-Effective Date Management and Operation of Reorganized Debtors..........................................22 5.7. Exit Financing Facility........................................22 5.8. Sale Leaseback Transaction.....................................22 5.9. Issuance of New Penn Traffic Common Shares.....................22 5.10. Transfer of Intercompany Claims................................22 5.11. Management Stock Incentive Program.............................22 5.12. Effectuating Documents; Further Transactions...................22 5.13. Exemption From Certain Transfer and Other Taxes................23 5.14. Continuation of Penn Traffic's Pension Plans...................23 5.15. Employment, Retirement, and Incentive Compensation Plans and Programs.................................................24 5.16. Substantive Consolidation of the Debtors.......................24 5.17. Post-Effective Date Trade Lien Program; Creditor Subordination Provision....................................................24 5.18. Cancellation of Existing Securities and Agreements.............25 ARTICLE VI - DISTRIBUTIONS AND CLAIMS ALLOWANCE...............................25 6.1. Cash Distributions.............................................25 6.2. Distributions to Holders of Allowed Unsecured Claims...........25 6.3. Miscellaneous Distribution Provisions..........................27 6.4. Procedure For Determination of Claims and Interests............29 ARTICLE VII - PENN TRAFFIC CREDITOR TRUST.....................................30 7.1. Appointment of Trustee.........................................30 7.2. Transfer of Trust Assets to the Penn Traffic Creditor Trust....30 7.3. The Penn Traffic Creditor Trust................................31 7.4. The Trust Advisory Board.......................................33 7.5. Distributions of Trust Recoveries..............................34 ARTICLE VIII - EFFECT OF THIS PLAN ON CLAIMS AND INTERESTS....................34 8.1. Revesting of Assets............................................34 8.2. Discharge of Claims and Termination of Interests...............35 8.3. INJUNCTIONS....................................................35 8.4. LIMITATION OF LIABILITY........................................36 8.5. RELEASES.......................................................36 8.6. RETENTION AND ENFORCEMENT, AND RELEASE, OF CAUSES OF ACTION....38 8.7. EXCLUSIONS AND LIMITATIONS ON EXCULPATION, INDEMNIFICATION, AND RELEASES.................................................38 ARTICLE IX - MISCELLANEOUS PROVISIONS.........................................38 9.1. Retention of Jurisdiction......................................38 9.2. Terms Binding..................................................40 9.3. Successors and Assigns.........................................40 9.4. Confirmation Order and Plan Control............................40 9.5. Governing Law..................................................40 ii PAGE 9.6. Severability...................................................40 9.7. Incorporation by Reference.....................................41 9.8. Modifications to this Plan.....................................41 9.9. Revocation, Withdrawal or Non-Consummation.....................41 9.10. Notice.........................................................41 iii The Penn Traffic Company ("Penn Traffic"), together with its direct and indirect subsidiaries, Dairy Dell, Inc., Penny Curtiss Baking Company, Inc., Big M Supermarkets, Inc., Sunrise Properties, Inc., Pennway Express, Inc., Big Bear Distribution Company, Bradford Supermarkets, Inc., P&C Food Markets, Inc. of Vermont, Abbott Realty Corporation, Commander Foods, Inc., P.T. Development LLC, and PT Fayettville/Utica, LLC, each a debtor and debtor-in-possession herein (collectively, the "Debtors"), hereby propose the following First Amended Joint Plan of Reorganization (the "Plan"). INTRODUCTION In general, this Plan provides for the substantive consolidation of all of the Debtors for voting and distribution purposes only, and provides for the Debtors' reorganization pursuant to the terms of this Plan. This Plan contemplates the payment in full in cash of all administrative claims and priority claims against the Debtors, and the repayment in full in cash of outstanding amounts under the Debtors' post-petition financing facility. Furthermore, this Plan provides for the treatment of allowed claims against, and interests in, the Debtors as follows: o With respect to each holder of an allowed unsecured claim, distribution of its PRO RATA share of 100% of the newly issued common stock of Reorganized Penn Traffic issued and distributed pursuant to Sections 5.9. and 6.2. of this Plan, subject to dilution in respect of new common stock that may be issued to management of Reorganized Penn Traffic; and o No distributions on account of the Debtors' issued and outstanding common stock, including claims arising out of or with respect to such common stock interests. Reference is made to the First Amended Disclosure Statement accompanying this Plan, including the exhibits thereto, for a discussion of the Debtors' history, business, properties, results of operations, and projections for future operations and risk factors, together with a summary and analysis of this Plan. All creditors entitled to vote on this Plan are encouraged to consult the First Amended Disclosure Statement and to read this Plan carefully before voting to accept or reject this Plan. NO SOLICITATION MATERIALS, OTHER THAN THE FIRST AMENDED DISCLOSURE STATEMENT AND RELATED MATERIALS TRANSMITTED THEREWITH AND APPROVED BY THE BANKRUPTCY COURT, HAVE BEEN AUTHORIZED BY THE BANKRUPTCY COURT FOR USE IN SOLICITING ACCEPTANCES OR REJECTIONS OF THIS PLAN. ARTICLE I DEFINITIONS AND INTERPRETATION A. DEFINITIONS. The following terms (which appear in this Plan as capitalized terms) shall have the meanings set forth below. A term used in this Plan and not defined in this Plan but that is defined in the Code has the meaning set forth in the Code. 1.1. "Administrative Claim" means a Claim to the extent that it is of the kind described in Section 503(b) of the Code and is entitled to priority under Section 507(a)(1) or 507(b) of the Code, including, without limitation, (a) any actual and necessary expenses of preserving the Estate, (b) any actual and necessary expenses of operating the business of the Debtors, (c) any actual indebtedness or obligations incurred or assumed by the Debtors during the pendency of the Cases in connection with the conduct of their business, (d) any actual expenses necessary or appropriate to facilitate or effectuate this Plan, (e) any amount required to be paid under Section 365(b)(1) of the Code in connection with the assumption of executory contacts or unexpired leases, (f) all allowances of compensation or reimbursement of expenses to the extent allowed by the Bankruptcy Court under Sections 330(a), 331 or 503(b)(2), (3), (4) or (5) of the Code, (g) claims for reclamation allowed in accordance with Section 546(c)(2) of the Bankruptcy Code and the Order Under 11 U.S.C. ss.ss. 105(a), 503(b) and 546(c)(2) Establishing Procedure for Treatment of Reclamation Claims dated July 15, 2003, as amended and supplemented, (h) the KZCS Success Fee, the PJSC Reorganization Fee, the Demme Success Bonus and the PBGC Allowed Administrative Claim, and (i) all fees and charges payable pursuant to Section 1930 of title 28 of the United States Code. 1.2. "Allowed Claim" means, with reference to any Claim, (a) any Claim against the Debtors which has been listed by the Debtors in their Schedules, as such Schedules may be amended by the Debtors from time to time in accordance with Bankruptcy Rule 1009, as liquidated in amount and not disputed or contingent, and with respect to which no contrary proof of claim has been filed, (b) any Claim specifically allowed under the Plan, (c) any Claim which is not a Disputed Claim, or (d) any Claim the amount or existence of which, if disputed, (i) has been determined by a Final Order of a court of competent jurisdiction other than the Bankruptcy Court, or (ii) has been allowed by Final Order of the Bankruptcy Court; PROVIDED, HOWEVER, that any Claims allowed solely for the purpose of voting to accept the Plan pursuant to an order of the Bankruptcy Court shall not be considered "Allowed Claims" hereunder. 1.3. "Amended Bylaws" has the meaning ascribed in Section 5.5. of this Plan. 1.4. "Amended Certificates of Incorporation" has the meaning ascribed in Section 5.5. of this Plan. 1.5. "Assets" means all assets of the Debtors or the Reorganized Debtors, as the case may be, of any nature whatsoever, including, without limitation, property of the Estate pursuant to Section 541 of the Code, Cash, Causes of Action, claims of right, interests and property, real and personal, tangible and intangible, but excluding all Claims waived or released pursuant to this Plan or the Confirmation Order. 2 1.6. "Ballot" means the ballot for voting to accept or reject this Plan distributed by the Debtors to all holders of impaired Claims entitled to vote on this Plan. 1.7. "Bankruptcy Court" means the United States Bankruptcy Court for the Southern District of New York in which the Cases were filed or any other court with jurisdiction over the Cases. 1.8. "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure and the local rules and standing orders of the Bankruptcy Court, as amended from time to time to the extent applicable to the Cases. 1.9. "Bar Date" means the dates by which the Bankruptcy Court ordered that proof of certain claims be filed in the Cases. 1.10. "Blairsville Property Claim" means the amounts due and owing by the Debtors under the Blairsville Property Mortgage Documents. 1.11. "Blairsville Property Mortgage Documents" means, collectively: (i) that certain "Promissory Note" dated April 22, 1996, in the initial principal amount of $1,840,000; (ii) that certain "Open-End Mortgage and Security Agreement and Fixture Financing Statement with Assignment of Leases and Rents," dated April 1, 1996 and recorded in Book 450; Page 1056, Clairon County P.A. Recorded of Deed; and (iii) all other "Loan Documents" as defined in the foregoing Open-End Mortgage and Security Agreement and Fixture Financing Statement with Assignment of Leases and Rents, all of which were originally entered into by and between The Penn Traffic Company and American Enterprise Life Insurance Company. 1.12. "Business Day" means any day other than a Saturday, Sunday or "legal holiday" as such term is defined in Bankruptcy Rule 9006(a). 1.13. "Cases" means the reorganization proceedings of the Debtors under chapter 11 of the Code, jointly administered as Case Nos. 03-22945 (ASH) through 03-22952 (ASH), 03-22954 (ASH) through 03-22957 (ASH), and 03-20312 (ASH). 1.14. "Cash" means cash and cash equivalents, such as bank deposits, checks and other similar items or instruments denominated in legal tender of the United States of America. 1.15. "Cash Balance Pension Plan" means the Penn Traffic Company Cash Balance Pension Plan, a defined benefit pension plan under ERISA. 1.16. "Causes of Action" means any and all actions, causes of action, suits, accounts, controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity or otherwise. 3 1.17. "Claim" means "claim" as defined in Section 101(5) of the Code, as supplemented by Section 102(2) of the Code, against any of the Debtors, whether or not asserted. 1.18. "Claimholder" means a holder of a Claim. 1.19. "Clarion Property Claim" means the amounts due and owing by the Debtors under the Clarion Property Mortgage Documents. 1.20. "Clarion Property Mortgage Documents" means, collectively: (i) that certain "Promissory Note" dated April 22, 1996, in the initial principal amount of $3,000,000; (ii) that certain "Open-End Mortgage and Security Agreement and Fixture Financing Statement with Assignment of Leases and Rents," dated April 1, 1996 and recorded in Book 528; Page 1, Indiana County P.A. Recorded of Deeds; and (iii) all other "Loan Documents" as defined in the foregoing Open-End Mortgage and Security Agreement and Fixture Financing Statement with Assignment of Leases and Rents, all of which were originally entered into by and between The Penn Traffic Company and American Enterprise Life Insurance Company. 1.21. "Class" means each category or group of holders of Claims or Claims and Interests as designated under this Plan. 1.22. "Code" means the United States Bankruptcy Code, 11 U.S.C. ss.ss. 101 ET SEQ., as amended from time to time to the extent applicable to the Cases. 1.23. "Common Stock" means, collectively, (a) the common stock of Penn Traffic issued and outstanding immediately prior to the Effective Date, (b) all options, warrants, conversion, privilege or other legal or contractual rights to purchase the common stock of Penn Traffic, and (c) any rights associated with such common stock. 1.24. "Common Stock Claim" means any Claim with respect to the Common Stock of the kind described in Section 510(b) of the Code. 1.25. "Confirmation" means "confirmation" as used in Section 1129 of the Code. 1.26. "Confirmation Date" means the date on which the Confirmation Order is entered on the docket by the clerk of the Bankruptcy Court. 1.27. "Confirmation Hearing" means the hearing(s) at which the Bankruptcy Court considers Confirmation of this Plan. 1.28. "Convenience Claim" means any (a) Allowed Unsecured Claim against any Debtor that is either (i) equal to or less than $5,000, or (ii) reduced to $5,000 pursuant to an election made on the Ballot by the holder of such Unsecured Claim, and, therefore, is included in Class 4 under this Plan; and (b) with respect to the Senior Note Allowed Claim (i) those portions of said claim held by beneficial holders of the Senior Notes in the amount of $5,000 or less, or (ii) reduced to $5,000 pursuant to an election made on the Ballot by a beneficial holder of Senior Notes. 4 1.29. "Confirmation Order" means an order of the Bankruptcy Court confirming this Plan pursuant to Section 1129 of the Code. 1.30. "Creditor" means "creditor" as defined in Section 101(10) of the Code and means a creditor of any Debtor. 1.31. "Creditors' Committee" means the Official Committee of Unsecured Creditors appointed by the United States Trustee for the Southern District of New York pursuant to Section 1102(a) of the Code in the Cases on June 9, 2003, as it may be reconstituted from time to time. 1.32. "Cure" means the distribution, within twenty (20) Business Days after the Effective Date or such other time as may be agreed upon by the parties or as ordered by the Bankruptcy Court, of Cash or such other property as may be agreed upon by the parties or ordered by the Bankruptcy Court with respect to the assumption of an executory contract or unexpired lease in accordance with the provisions of Article III of this Plan. 1.33. "Debtors" has the meaning set forth on page 1 of this Plan, a list of which entities, together with their jurisdictions of incorporation and case numbers in the Cases, is attached hereto as Plan Schedule 1.33. 1.34. "Demme Agreement" means that certain Employment Agreement dated September, 2003 (as amended from time to time) and approved by Final Order of the Bankruptcy Court dated September 17, 2003, between James A. Demme and the Debtors. 1.35. "Demme Success Bonus" means the distribution, as set forth on Plan Schedule 1.35, to be made on the Initial Distribution Date to Mr. Demme on account of the Administrative Claim held by Mr. Demme pursuant to the Demme Agreement. 1.36. "DIP Approval Orders" means, collectively, (1) the Interim and Final Orders (a) Authorizing Debtors to (i) Obtain Post-Petition Financing, Including Execution of Credit Agreement and (ii) Grant Liens and Priority Administrative Expense Status, (b) Approving Use Of Cash Collateral and Granting Adequate Protection and (c) Scheduling Final Hearing on Post-Petition Financing and Approving Form and Manner of Notice Thereof, dated May 30, 2003 and July 31, 2003, respectively, and (2) the Order Pursuant to Section 364 of the Bankruptcy Code and Rule 4001 of the Federal Rules of Bankruptcy Procedure Authorizing the Extension of the Existing DIP Financing Facility and Approving Certain Amendments thereto dated March 30, 2004. 1.37. "DIP Credit Agreement" means the Senior Secured Super-Priority Debtor-in-Possession Loan and Security Agreement, dated as of August 7, 2003, by and among the Debtors, the lenders party thereto, Fleet Capital, as administrative agent, GMAC Commercial Finance, LLC, as documentation agent, and Amsouth Bank and Bank of America, N.A., as co-agents, as amended from time to time. 1.38. "DIP Facility" means the senior secured superpriority debtor-in-possession financing facility in an original principal amount up to $270 million, provided by the DIP Lenders pursuant to the DIP Credit Agreement, as approved by the DIP Approval Orders. 5 1.39. "DIP Facility Claim" means any Claim arising under the DIP Credit Agreement and related agreements. 1.40. "DIP Lenders" means the Lenders as defined in the DIP Credit Agreement. 1.41. "Disbursing Agent" means one or more disbursing agents, to be designated by the Debtors prior to the Confirmation Hearing in consultation with the Creditors' Committee, which may receive and make distributions to holders of Allowed Claims under and as provided in this Plan. 1.42. "First Amended Disclosure Statement" means the First Amended Disclosure Statement with respect to this Plan approved by order of the Bankruptcy Court and all supplements, schedules and exhibits thereto. 1.43. "Disputed Claim" means any Claim against a Debtor to the extent that (a) the allowance of such Claim or any portion thereof is the subject of an objection, appeal or motion to estimate that has been timely filed by a party in interest and which objection, appeal or motion has not been determined by a Final Order, (b) such Claim is scheduled by the Debtors in the Schedules as disputed, contingent and/or unliquidated or (c) during the period prior to the deadline fixed by this Plan and/or the Bankruptcy Court for objecting to such Claim, such Claim is in excess of the amount scheduled as other than disputed, unliquidated or contingent. 1.44. "Distribution Record Date" means the date which is ten (10) days prior to the Voting Deadline. 1.45. "Effective Date" means the first Business Day that is ten (10) days after the later of the date on which (a) all conditions precedent set forth in Section 4.1. of this Plan have been satisfied or waived as provided in Section 4.2. of this Plan and (b) no stay of the Confirmation Order is in effect. 1.46. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ss.ss. 1301-1461 (2000). 1.47. "Estate" means the estates of the Debtors, individually or collectively, as is appropriate in the context, created in the Cases pursuant to Section 541 of the Code. 1.48. "Exculpated Persons" has the meaning ascribed in Section 8.4. of this Plan. 1.49. "Exhibit Filing Date" means the date on which certain exhibits and schedules to this Plan, which shall be in a form reasonably acceptable to the Creditors' Committee, shall be filed with the Bankruptcy Court, which date shall be at least ten (10) days prior to the Voting Deadline. 1.50. "Exit Financing Facility" means the senior secured financing facility to be entered into by the Reorganized Debtors and the lender(s) thereunder as contemplated in 6 Section 5.7. of this Plan, providing for the principal terms and conditions set forth on Plan Schedule 5.7 to be filed on or before the Exhibit Filing Date. 1.51. "Face Amount" means respecting a Claim, the amount equal to the first of the following that is applicable: (a) the amount fixed or estimated in an order of the Bankruptcy Court; (b) the liquidated amount set forth in a proof of claim filed by the applicable Bar Date; or (c) the amount of the Claim listed in the Schedules as liquidated or not contingent or disputed. If none of the foregoing applies, the Face Amount of the Claim shall be zero ($0) dollars. 1.52. "Filed Fee Applications" has the meaning ascribed in Section 5.2. of this Plan. 1.53. "Final Distribution Date" means the first Business Day that is ten (10) days (or such longer period as may be reasonably determined by the Reorganized Debtors in consultation with the Post-Effective Date Committee) after the date on which all Disputed Claims have been resolved by Final Order. 1.54. "Final Order" means an order or judgment of the Bankruptcy Court or other court of competent jurisdiction (a) that has not been reversed, stayed, modified or amended and as to which (i) any right to appeal or seek certiorari, review, reargument, stay or rehearing has been waived or (ii) the time to appeal or seek certiorari, review, reargument, stay or rehearing has expired and no appeal or petition for certiorari, review, reargument, stay or rehearing is pending or (b) as to which an appeal has been taken or petition for certiorari, review, reargument, stay or rehearing has been filed and (i) such appeal or petition for certiorari, review, reargument, stay or rehearing has been resolved by the highest court to which the order or judgment was appealed or from which certiorari, review, reargument, stay or rehearing was sought or (ii) the time to appeal further or seek certiorari, further review, reargument, stay or rehearing has expired and no such further appeal or petition for certiorari, further review, reargument, stay or rehearing is pending; PROVIDED, HOWEVER, that the possibility that a motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules or applicable state court rules of civil procedure, may be filed with respect to such order shall not cause such order not to be a Final Order. 1.55. "Funding Contribution" means any payments made by the Debtors or Reorganized Debtors pursuant to Section 7.3.(D) of this Plan. 1.56. "Initial Distribution Date" means the first Business Day that is twenty (20) days (or such longer period as may be reasonably determined by the Reorganized Debtors in consultation with the Post-Effective Date Committee) after the Effective Date. 1.57. "Intercompany Claim" means a Claim by a Debtor or an affiliate of a Debtor against a Debtor or an affiliate of a Debtor. 1.58. "Interest" means all rights (including unpaid dividends) arising from any equity security (as defined in Section 101(16) of the Code) of any of the Debtors, including, without limitation, the Common Stock, but excluding Common Stock Claims. 7 1.59. "Interim Distribution Date" means, in the first instance, any date after the Initial Distribution Date on which the Reorganized Debtors determine, in consultation with the Post-Effective Date Committee, that a distribution should be made on account of Class 3 Allowed Claims in light of, INTER ALIA, resolutions of Disputed Claims and the administrative costs of such distribution and, thereafter, the first Business Day occurring on or immediately after each subsequent October 1st, January 1st, April 1st and July 1st, unless extended in consultation with the Post-Effective Date Committee. 1.60. "KZCS" means KZCS Services, LLC. 1.61. "KZCS Agreement" means that certain Services Agreement dated May 29, 2003 (as amended from time to time) and approved by the KZCS Order, by and among the Debtors, Steven G. Panagos and KZCS. 1.62. "KZCS Order" means that certain final order of the Bankruptcy Court dated September 26, 2003 approving the KZCS Agreement. 1.63. "KZCS Success Fee" means the distribution, as set forth on Plan Schedule 1.63, to be made to KZCS on account of the Administrative Claim held by KZCS pursuant to the KZCS Agreement, subject to satisfying paragraphs 8 and 9 of the KZCS Order. 1.64. "Lien" means, with respect to any interest in property, any mortgage, lien, pledge, charge, security interest, easement or encumbrance of any kind whatsoever affecting such interest in property. 1.65. "Management Stock Incentive Program" means a stock incentive plan, pursuant to which, among other provisions, the Reorganized Debtors shall reserve New Penn Traffic Common Shares for award to certain members of management of the Reorganized Debtors, at such times and in a manner to be determined in the sole discretion of the Board of Directors of Reorganized Penn Traffic, such reserved shares to not exceed 10%, on a fully diluted basis, of the aggregate amount of New Penn Traffic Common Shares distributable under Section 6.2. 1.66. "New Penn Traffic Common Shares" means the shares of common stock of Reorganized Penn Traffic that are to be issued and distributed pursuant to, and as contemplated by, Sections 5.9. and 6.2. of this Plan. 1.67. "Other Debtor Pension Plans" means (a) Big Bear Stores Hourly Paid General Merchandise Warehouse Employees' Pension Plan, (b) Big Bear Stores Hourly Paid Food Warehouse Employee's Pension Plan, (c) Pension Plan for Bargaining Employees of Eastern Pennsylvania and (d) Riverside Division of Penn Traffic Company Bargaining Employees Pension Plan. 1.68. "Other Secured Claim" means a Secured Claim classified in Class 2 under this Plan. 8 1.69. "PBGC" means the Pension Benefit Guaranty Corporation, a wholly-owned United States government corporation that administers the defined benefit pension plan termination insurance program under Title IV of ERISA. 1.70. "PBGC Allowed Administrative Claim" means an Administrative Claim in the amount of $3,500,000.00 in favor of the PBGC secured by a Post-Effective Date Trade Lien, which shall be an Allowed Claim pursuant to Section 2.1.(F) of this Plan. 1.71. "PBGC Allowed Unsecured Claim" means an Unsecured Claim in the amount of $60,000,000.00 in favor of the PBGC which shall be an Allowed Class 3 Claim pursuant to Section 2.8.(B) of this Plan. 1.72. "PBGC Claims" means all Claims of the PBGC against any of the Debtors, whether or not filed in the Cases, including, without limitation, proofs of claim numbered 2103, 2104, 2105, 2106, 2107, 2108, 2109, 2110, 2111, 2112, 2113, 2114, 2115, 2116, and 2117. 1.73. "Penn Traffic Creditor Trust" means the trust created pursuant to Section 7.3. of this Plan. 1.74. "PBGC Settlement" means the settlement reached between the Debtors and the PBGC, in consultation with the Creditors' Committee, with regard to the PBGC Claims and related matters, which is subject to Bankruptcy Court approval pursuant to Rule 9019 of the Bankruptcy Rules. 1.75. "Person" means any person or entity, including, without limitation, any individual, partnership, joint venture, association, corporation, limited liability company, limited liability partnership company, trust, estate, unincorporated organization or governmental unit. 1.76. "Petition Date" means May 30, 2003, the date on which the petitions initiating the Cases were filed with the Bankruptcy Court. 1.77. "PJSC" means Peter J. Solomon Company L.P. 1.78. "PJSC Agreement" means that certain Letter Agreement dated June 11, 2003 (as amended) and approved by final order of the Bankruptcy Court dated September 26, 2003 between the Debtors and PJSC. 1.79. "PJSC Reorganization Fee" means the distributions, as set forth on Plan Schedule 1.79, to be made to PJSC on account of the Administrative Claim held by PJSC pursuant to the PJSC Agreement. 1.80. "Plan" means this First Amended Joint Plan of Reorganization, as defined on page 1 of this Plan, and all addenda, exhibits, schedules and other attachments hereto, all of which are incorporated herein by reference, as the same may be amended from time to time, pursuant to this Plan, the Code or the Bankruptcy Rules. 9 1.81. "Post-Effective Date Committee" has the meaning ascribed in Section 5.2. of this Plan. 1.82. "Post-Effective Date Committee Expenses" has the meaning ascribed in Section 5.2. of this Plan. 1.83. "Post-Effective Date Committee Professional Fees" has the meaning ascribed in Section 5.2. of this Plan. 1.84. "Post-Effective Date Trade Lien" means the lien on certain of the assets of the Reorganized Debtors granted in connection with the Post-Effective Date Trade Lien Program. 1.85. "Post-Effective Date Trade Lien Program" has the meaning ascribed in Section 5.17. of this Plan. 1.86. "Pre-Petition Releasees" has the meaning ascribed in Section 8.5.(B) of this Plan. 1.87. "Pre-Petition Released Matters" has the meaning ascribed in Section 8.5.(B) of this Plan. 1.88. "Pre-Petition Secured Lenders" means the lenders party to the Debtors' pre-petition credit facility. 1.89. "Priority Non-Tax Claim" means a Claim to the extent that it is of the kind described in, and entitled to priority under, Section 507(a)(3), (4), (5) or (6) of the Code. 1.90. "Priority Tax Claim" means a Claim to the extent that it is of the kind described in, and entitled to priority under, Section 507(a)(8) of the Code. 1.91. "Reorganized Debtors" means, on and after the Effective Date, collectively, all of the Debtors that are reorganized under and pursuant to this Plan, and not merged pursuant to Section 5.4. of this Plan. 1.92. "Reorganized Penn Traffic" means, on and after the Effective Date, Penn Traffic, as reorganized under and pursuant to this Plan. 1.93. "Sale Leaseback Transaction" means the transaction to be entered into by the Reorganized Debtors and the purchaser thereunder as contemplated in Section 5.8. of this Plan, providing for the principal terms and conditions set forth on Plan Schedule 5.8 to be filed on or before the Exhibit Filing Date. 1.94. "Schedules" means the joint Schedules of Assets, Liabilities and Executory Contracts filed by the Debtors with the Clerk of the Bankruptcy Court for the Southern District of New York pursuant to Bankruptcy Rule 1007, as such schedules have been or may be amended or supplemented by the Debtors from time to time. 10 1.95. "Secured Claim" means a Claim that constitutes a secured claim under Section 506(a) or 1111(b) of the Code. 1.96. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 1.97. "Senior Notes" means the $100,000,000 of 11% Senior Debt Securities due on June 29, 2009, issued pursuant to the Senior Note Indenture. 1.98. "Senior Note Allowed Claim" means the Unsecured Claim filed by the Senior Note Trustee in the aggregate amount of $104,546,556.89 arising under or relating to the Senior Note Indenture, which is an Allowed Claim pursuant to Section 2.8.(B) of this Plan. 1.99. "Senior Note Indenture" means the Indenture dated as of June 29, 1999 by and between The Penn Traffic Company and The Bank of New York, previously known as IBJ Whitehall Bank & Trust Company, as Indenture Trustee. 1.100. "Senior Note Trustee" means The Bank of New York, as Indenture Trustee under the Senior Note Indenture for the holders of the Senior Notes. 1.101. "Senior Note Trustee Claim" means the Claim of the Senior Note Trustee for its reasonable fees and expenses accrued and unpaid through the Effective Date. 1.102. "Subsidiary Equity Interests" means any share of common stock or other instrument evidencing a present ownership interest in any of Penn Traffic's subsidiaries, whether or not transferable, and any options, warrants or rights, contractual or otherwise, to acquire any such interest. 1.103. "Taxpayer Identification Request Form" means, in the case of a domestic person or entity, an IRS Form W-9 and in the case of a foreign person or entity an IRS Form W-8. 1.104. "Trade Lien Claim" means a Secured Trade Claim (as defined in the Trade Lien Order) entitled to the benefits of the Trade Liens (as defined in the Trade Lien Order) granted under the Trade Lien Program (as defined in the Trade Lien Order) which has not been paid in full as of the Effective Date. 1.105. "Trade Lien Order" means that Order Pursuant to 11 U.S.C. ss.ss. 105(A) & 364(C)(3) Authorizing Debtors to Implement the Trade Lien Program, Grant Junior Liens, Waive Certain Avoidance Claims and Amend Reclamation Claims Order dated October 23, 2003, as amended and supplemented. 1.106. "Trust Advisory Board" means the board that is to be created pursuant to Section 7.4. of this Plan for the purpose of advising the Trustee with respect to decisions affecting the Penn Traffic Creditor Trust. 1.107. "Trust Agreement" means that certain Trust Agreement regarding the Penn Traffic Creditor Trust, a form of which is attached to this Plan as Exhibit 3. 11 1.108. "Trust Assets" means those assets, including the Trust Claims, to be transferred to and owned by the Penn Traffic Creditor Trust pursuant to Section 7.2. of this Plan. 1.109. "Trust Claims" means any and all Causes of Action against (a) any Person (excluding Kroll Zolfo Cooper LLC, KZCS, LLC and Paul, Weiss, Rifkind, Wharton & Garrison, LLP, and each of their respective affiliates, officers, directors, partners, employees and members), which allege breaches of duty owed to Penn Traffic by such Person and which are the subject matter of any action or proceeding instituted by the Securities and Exchange Commission against such Person, whether such action or proceeding is adjudicated or settled, and (b) any accounting or auditing firm (including but not limited to PricewaterhouseCoopers LLP) with respect to the Debtors' accounting practices or audit or review of the Debtors' financial statements. 1.110. "Trust Recoveries" means any and all proceeds received by the Penn Traffic Creditor Trust from (a) the prosecution to, and collection of, a final judgment of a Trust Claim and/or (b) the settlement or other compromise of a Trust Claim. 1.111. "Trustee" means the trustee of the Penn Traffic Creditor Trust as contemplated by the Trust Agreement. 1.112. "Unclaimed Property" means any distribution under the Plan that is unclaimed by the holder of the Allowed Claim entitled to such distribution one hundred twenty (120) days after the distribution date applicable to such distribution. 1.113. "Unsecured Claim" means a Claim that is not an Administrative Claim, a Priority Tax Claim, a Priority Non-Tax Claim, an Other Secured Claim, an Intercompany Claim or a Common Stock Claim. 1.114. "Voting Deadline" means the date set in an order of the Bankruptcy Court as the deadline for the return of Ballots accepting or rejecting this Plan. B. INTERPRETATION. For purposes of this Plan: (a) whenever from the context it is appropriate, each term, whether stated in the singular or the plural, shall include both the singular and the plural; (b) unless otherwise provided in this Plan, any reference in this Plan to a contract, instrument, release, indenture or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (c) unless otherwise provided in this Plan, any reference in this Plan to an existing document or exhibit means such document or exhibit, as it may have been or may be amended, modified or supplemented pursuant to this Plan; (d) unless otherwise specified herein, any reference to an entity as a holder of a Claim includes that entity's successors, assigns and affiliates; (e) unless otherwise specified, all references in this Plan to Sections, Articles, schedules and exhibits are references to Sections, Articles, schedules and exhibits of or to this Plan; (f) the words "herein" and "hereto" refer to this Plan in its entirety rather than to a particular portion of this Plan; (g) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be part of or to affect the interpretation of this Plan; and (h) the rules of construction set forth in Section 102 of the Code shall apply. 12 C. COMPUTATION OF TIME. In computing any period of time prescribed or allowed by this Plan, the provisions of Bankruptcy Rule 9006(a) shall apply. ARTICLE II CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS The following is a designation of the Classes of Claims and Interests classified under this Plan. A Claim or Interest is in a particular Class for purposes of voting on, and of receiving distributions pursuant to, this Plan only to the extent that such Claim or Interest is an Allowed Claim or Interest in that Class and such Claim or Interest has not been paid, released or otherwise settled prior to the Effective Date. Claims against more than one Debtor with respect to a single obligation, by reason of guaranty, joint or "control group" liability, or otherwise, shall be deemed to be a single Claim in the Allowed amount of such obligation for purposes of voting, allowance, distribution and all other purposes under this Plan. In accordance with Section 1123(a)(1) of the Code, Administrative Claims and Priority Tax Claims have not been classified, although the treatment for such unclassified Claims is set forth below. A. UNCLASSIFIED CLAIMS. 2.1. ADMINISTRATIVE CLAIMS. (A) GENERAL. Subject to the provisions of Section 6.4.(A) of this Plan or as otherwise specifically provided in this Plan, or unless otherwise agreed by the holder of an Allowed Administrative Claim (in which event such other agreement shall govern), each holder of an Allowed Administrative Claim shall be paid in full in Cash (i) at the sole option of the Debtors (before the Effective Date) or the Reorganized Debtors (on or after the Effective Date), (a) in the ordinary course of business as the Claim becomes due and owing or (b) on the Initial Distribution Date or (ii) on such other date as the Bankruptcy Court may order, including, without limitation, in the case of professional persons employed by the Debtors or the Creditors' Committee who have filed applications for final compensation in accordance with Section 6.4.(A) of this Plan, the date on which orders approving amounts set forth in such applications are entered by the Bankruptcy Court. (B) STATUTORY FEES. On the Initial Distribution Date, Administrative Claims for fees payable pursuant to Section 1930 of title 28 of the United States Code, 28 U.S.C. ss. 1930, shall be paid in Cash in an amount equal to the amount of such Administrative Claims. All such fees payable after the Initial Distribution Date shall be assumed and paid by the Reorganized Debtors. All fees payable to the United States Trustee shall be paid until entry of a final decree or an order dismissing the Cases. (C) KZCS SUCCESS FEE. The Reorganized Debtors shall make the distributions as set forth on Plan Schedule 1.63 in satisfaction of the KZCS Success Fee; PROVIDED, HOWEVER, that, in accordance with paragraph 9 of the KZCS Order, KZCS shall make a request to the Bankruptcy Court for payment of the KZCS Success Fee on notice to the United States Trustee and all other parties entitled to receive notice. 13 (D) PJSC REORGANIZATION FEE. Subject to Section 6.4.(A) of this Plan, the Reorganized Debtors shall make the distributions as set forth on Plan Schedule 1.79 in satisfaction of the PJSC Reorganization Fee. (E) DEMME SUCCESS BONUS. The Reorganized Debtors shall make the distributions as set forth on Plan Schedule 1.35, in satisfaction of the Demme Success Bonus. (F) PBGC ALLOWED ADMINISTRATIVE CLAIM. The Reorganized Debtors shall make distributions on account of the PBGC Allowed Administrative Claim in four equal installments payable bi-annually commencing on the date which is six months following the Effective Date, and to be secured until fully paid by the Post-Effective Date Trade Lien for so long as the Post-Effective Date Trade Lien Program is in effect and, thereafter, by a lien attached to the same collateral and on the same terms and of the same priority as under the Post-Effective Date Trade Lien Program. 2.2. SENIOR NOTE TRUSTEE CLAIM. The Reorganized Debtors shall pay the Senior Note Trustee Claim in Cash on the Effective Date, without the need for the Senior Note Trustee to file an application for allowance with the Bankruptcy Court. Upon payment of such Senior Note Trustee Claim in full, the Senior Note Trustee shall be deemed to have released its lien and priority rights for its fees and expenses under the Senior Note Indenture solely to the extent of such payment. 2.3. PRIORITY TAX CLAIMS. Unless otherwise agreed by the holder of an Allowed Priority Tax Claim (in which event such other agreement shall govern), each holder of an Allowed Priority Tax Claim shall receive, at the Reorganized Debtors' option, (a) on the Initial Distribution Date, Cash equal to the amount of such Allowed Priority Tax Claim or (b) Cash in six equal annual installments, together with interest thereon at the legal rate required for such claims in chapter 11 cases, which interest shall be paid annually in arrears pursuant to Section 1129(a)(9)(C) of the Code. 2.4. DIP FACILITY CLAIM. On the Effective Date, the DIP Facility Claim shall be paid in full in Cash, or otherwise satisfied in a manner acceptable to the DIP Lenders. 2.5. POST-PETITION TRADE LIEN CLAIMS. Upon the Effective Date, the Lien granted by the Trade Lien Program shall be released. Unless otherwise agreed by the holder of an Allowed Trade Lien Claim (in which event such other agreement shall govern), each holder of an Allowed Trade Lien Claim shall be paid in full in Cash on the date on which, in the ordinary course of business, such Allowed Trade Lien Claim becomes due and owing. If the Reorganized Debtors implement a Post-Effective Date Trade Lien Program, then each holder of an Allowed Trade Lien Claim shall also share PARI PASSU in any Post-Effective Date Trade Lien on the terms and conditions described in Section 5.17. hereof. 14 B. CLASSIFIED CLAIMS AND INTERESTS. 2.6. CLASS 1 -- PRIORITY NON-TAX CLAIMS (A) CLASSIFICATION. Class 1 consists of all Priority Non-Tax Claims. (B) ALLOWANCE. Class 1 Claims shall be allowed or disallowed in accordance with Section 6.4.(B) of this Plan and applicable provisions of the Code and Bankruptcy Rules. (C) TREATMENT. Unless otherwise agreed by the holder of an Allowed Priority Non-Tax Claim (in which event such agreement shall govern), each holder of an Allowed Class 1 Claim shall be paid in full in Cash on the later of the Initial Distribution Date and a date that is as soon as practicable after the date upon which such Claim becomes an Allowed Priority Non-Tax Claim. (D) IMPAIRMENT AND VOTING. Class 1 Claims are unimpaired and the holders thereof are not entitled to vote on this Plan. 2.7. CLASS 2 -- OTHER SECURED CLAIMS. (A) CLASSIFICATION. Class 2 consists of Other Secured Claims. (B) ALLOWANCE. Class 2 Claims shall be allowed or disallowed in accordance with Section 6.4.(B) of this Plan and applicable provisions of the Code and Bankruptcy Rules. (C) TREATMENT. Other Secured Claims against the Debtors shall, at the sole option of the Debtors, be (i) paid in full in Cash on the Initial Distribution Date, (ii) reinstated according to the terms of the relevant instrument, (iii) paid on such other terms as the Debtors and the holder of such Claim may agree, or (iv) satisfied through the surrender by the applicable Debtors of the collateral securing the Claim to the holder thereof. Each of the Blairsville Property Claim and the Clarion Property Claim shall be Allowed Class 2 "Other Secured Claims" hereunder. Notwithstanding anything contained in this Plan to the contrary, pursuant to and in accordance with the terms of Section 1124(2) of the Bankruptcy Code, the Blairsville Property Mortgage Documents and the Clarion Property Mortgage Documents shall be reinstated and reaffirmed in accordance with their terms as provided in Section 2.7.(C)(ii) hereof, and such agreements shall continue in full force and effect following the Effective Date. (D) IMPAIRMENT AND VOTING. Class 2 Claims are unimpaired and the holders thereof are not entitled to vote on this Plan. 15 2.8. CLASS 3 -- UNSECURED CLAIMS. (A) CLASSIFICATION. Class 3 consists of Unsecured Claims, including the PBGC Claims and the Senior Note Allowed Claim. (B) ALLOWANCE. Class 3 Unsecured Claims shall be allowed or disallowed in accordance with Section 6.4.(B) of this Plan and applicable provisions of the Code and Bankruptcy Rules, except (i) in accordance with the PBGC Settlement, the PBGC Allowed Unsecured Claim shall be an Allowed Class 3 Claim pursuant to this Plan and entitled to the distributions set forth herein, and (ii) the Senior Note Allowed Claim shall be an Allowed Claim pursuant to this Plan and entitled to the distributions set forth herein and any proof of claim in respect of the Senior Notes filed by a registered or beneficial holder of Senior Notes for principal and interest owing as of the Petition Date shall be deemed expunged and disallowed as duplicative of proof of claim numbered 2099 filed by the Senior Note Trustee. (C) TREATMENT. Each holder of an Allowed Unsecured Claim shall receive (i) its PRO RATA share of 100% of the New Penn Traffic Common Shares issued and distributed pursuant to Sections 5.9. and 6.2. of this Plan, subject to (a) dilution resulting from the issuance of additional New Penn Traffic Common Shares upon the exercise of options to purchase New Penn Traffic Common Shares granted to management of Reorganized Penn Traffic pursuant to the Management Stock Incentive Program, and (b) such adjustments to the total issued New Penn Traffic Common Shares as may occur pursuant to Section 6.3.(A) of this Plan, and (ii) its PRO RATA share of all Trust Recoveries, if any. (D) IMPAIRMENT AND VOTING. Class 3 Unsecured Claims are impaired and the holders thereof are entitled to vote on this Plan. 2.9. CLASS 4 -- CONVENIENCE CLAIMS. (A) CLASSIFICATION. Class 4 consists of all Convenience Claims. (B) ALLOWANCE. Claims, including claims of beneficial holders of Senior Notes, in the amount of $5,000.00 or less shall be Allowed in the amount filed or scheduled, and Claims voluntarily reduced to $5,000.00 by Ballot election shall be Allowed in the amount of $5,000.00. (C) TREATMENT. Each holder of an Allowed Convenience Claim shall receive Cash equal to 15% of its Allowed Claim against the Debtors, PROVIDED, HOWEVER, that a holder of more than one Allowed Convenience Claim, which Claims in the aggregate exceed $5,000.00, may elect to be treated with respect to and in the amount of such aggregated Claim, as a Class 3 Claimholder for distribution purposes only. (D) IMPAIRMENT AND VOTING. Class 4 Convenience Claims are impaired and the holders thereof are entitled to vote on this Plan. 16 2.10. CLASS 5 -- INTERCOMPANY CLAIMS. (A) CLASSIFICATION. Class 5 consists of Intercompany Claims. (B) TREATMENT. Subject to Section 5.10. of this Plan, Intercompany Claims shall be discharged, and the holders of Intercompany Claims shall not be entitled to receive or retain any property on account of such Claims. (C) IMPAIRMENT AND VOTING. Class 5 Intercompany Claims are impaired and the holders thereof are deemed not to have accepted this Plan. 2.11. CLASS 6 -- COMMON STOCK CLAIMS AND INTERESTS. (A) CLASSIFICATION. Class 6 consists of Common Stock Claims and Interests. (B) TREATMENT. Interests shall be cancelled, and the holders of Common Stock Claims and Interests shall not be entitled to receive or retain any property on account of such Claims and Interests. (C) IMPAIRMENT AND VOTING. Class 6 Common Stock Claims and Interests are impaired and the holders thereof are deemed not to have accepted this Plan. ARTICLE III TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES 3.1. REJECTED CONTRACTS AND LEASES1.1. Each executory contract and unexpired lease to which any of the Debtors is a party shall be deemed automatically rejected as of the Effective Date, UNLESS such executory contract or unexpired lease (a) shall have been previously rejected or assumed by order of the Bankruptcy Court or (b) is the subject of a motion to assume or reject filed on or before the Confirmation Date or (c) is listed on the schedule of contracts and leases to be rejected or assumed as of the Effective Date pursuant to this Plan, annexed as Plan Schedules 3.1 and 3.2, respectively (and as the same may be modified or supplemented, if at all, pursuant to Section 3.3.(B) of this Plan). The Confirmation Order shall constitute an order of the Bankruptcy Court approving such deemed rejection as of the Effective Date. All executory contracts and unexpired leases specifically listed on the schedule of rejected executory contracts and unexpired leases, annexed as Plan Schedule 3.1, shall be deemed automatically rejected pursuant to this Plan by the applicable Debtor as of the Effective Date. 3.2. ASSUMED CONTRACTS AND LEASES. All executory contracts and unexpired leases specifically listed on the schedule of assumed executory contracts and unexpired leases, which shall be filed twenty (20) days prior to the Voting Deadline as Plan Schedule 3.2, as modified or supplemented, if at all, pursuant to Section 3.3.(B) of this Plan, shall be deemed automatically assumed pursuant to this Plan by the applicable Debtor as of the Effective Date. Each executory contract and unexpired lease that is assumed under this Plan and relates to the use, ability to acquire or occupancy of real property shall include (a) all 17 modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affect such executory contract or unexpired lease and (b) all executory contracts or unexpired leases appurtenant to the premises, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, reciprocal easement agreements and any other interests in real estate or rights in rem related to such premises, unless any of the foregoing agreements has been rejected pursuant to a Final Order of the Bankruptcy Court or is otherwise rejected as part of this Plan. 3.3. MISCELLANEOUS. (A) The Debtors reserve the right to file a motion on or before the Confirmation Date to assume or reject any executory contract or unexpired lease. (B) Notwithstanding any other provision of this Plan, each of the Debtors shall retain the right, at any time prior to the Confirmation Hearing, to modify or supplement Plan Schedule 3.1 and Plan Schedule 3.2 including, without limitation, the right to add any executory contract or unexpired lease to, or delete any executory contract or unexpired lease from, Plan Schedule 3.1 or Plan Schedule 3.2. The Debtors shall promptly provide notice of any amendment, modification or supplement to Plan Schedules 3.1 or 3.2 to the Creditors' Committee, the DIP Lenders and the affected non-debtor party to the executory contract or unexpired lease. (C) Listing an executory contract or unexpired lease on Plan Schedule 3.1 or Plan Schedule 3.2 shall not constitute an admission by any of the Debtors or the Reorganized Debtors that such contract or lease (including any related agreements that may exist) is an executory contract or unexpired lease or that the applicable Debtor or Reorganized Debtor has any liability thereunder. 3.4. PAYMENTS RELATED TO ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Any monetary amounts by which each executory contract and unexpired lease to be assumed under this Plan may be in default shall be satisfied by Cure in the amount, if any, set forth in Plan Schedule 3.2, or, in the event of an objection to such Cure amount, in the amount agreed between the parties or as ordered by the Bankruptcy Court. Objections, if any, to a Cure amount set forth on Plan Schedule 3.2 shall be filed by the non-debtor party to the unexpired lease or executory contract with the Bankruptcy Court on or before the Voting Deadline. If the non-debtor party to the unexpired lease or executory contract does not file an objection with the Bankruptcy Court to the amount of Cure set forth in Plan Schedule 3.2 on or before the Voting Deadline, or if notified of the assumption after the Voting Deadline, within ten (10) days of such notice, such non-debtor party shall be deemed to accept such Cure amount. In the event of a dispute regarding (a) the nature or the amount of any Cure, (b) the ability of the applicable Reorganized Debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of Section 365 of the Code) under the contract or lease to be assumed or (c) any other matter pertaining to assumption, such dispute shall be determined by the Bankruptcy Court, or as the parties may otherwise agree. To the extent that the Debtor which is a party to the unexpired lease or executory contract is to be merged pursuant to Section 5.4. of 18 this Plan, upon assumption as contemplated herein, the Reorganized Debtor that is the surviving entity after such merger shall be the party to the unexpired lease or executory contract. 3.5. POST-PETITION CONTRACTS AND LEASES. All contracts, agreements and leases entered into, or assumed by, the Debtors after the Petition Date shall be deemed assigned by the Debtors to the Reorganized Debtors on the Effective Date. 3.6. REJECTION DAMAGES BAR DATE. Except as provided by any separate Bar Date order previously entered by the Bankruptcy Court, if the rejection by a Debtor, pursuant to this Plan or otherwise, of an executory contract or unexpired lease results in a Claim, then such Claim shall be forever barred and shall not be enforceable against any Debtor or Reorganized Debtor or the properties of any of them unless a proof of such Claim is filed with the clerk of the Bankruptcy Court and served upon counsel to the Debtors within thirty (30) days after service of the earlier of (a) notice of the Confirmation Date or (b) other notice that the executory contract or unexpired lease has been rejected pursuant to an order of the Bankruptcy Court. ARTICLE IV CONDITIONS PRECEDENT 4.1. CONDITIONS TO OCCURRENCE OF EFFECTIVE DATE. The following are conditions precedent to the occurrence of the Effective Date, each of which may be satisfied or waived in accordance with Section 4.2. of this Plan: (i) the Reorganized Debtors shall have entered into definitive documentation with respect to the Exit Financing Facility and the Sale Leaseback Transaction, in each case, which shall be reasonably satisfactory to the Creditors' Committee, and all conditions precedent under the Exit Financing Facility and Sale Leaseback Transaction shall have been satisfied (but for the occurrence of the Effective Date); (ii) the Confirmation Order shall have become a Final Order; (iii) the Amended Certificates of Incorporation shall have been properly filed with the appropriate Secretaries of State; (iv) all authorizations, consents and regulatory approvals required (if any) for the Plan's effectiveness shall have been obtained; (v) the Cash Balance Pension Plan shall have been terminated pursuant to relevant provisions of ERISA; (vi) the Bankruptcy Court shall have entered a Final Order approving the PBGC Settlement, and (vii) the Reorganized Debtors shall have entered into the Trust Agreement. 4.2. WAIVER OF CONDITIONS TO CONSUMMATION. The conditions set forth in Section 4.1. of this Plan may be waived, in whole or in part, upon the mutual consent of the Debtors and the Creditors' Committee, without notice to any other parties in interest or the Bankruptcy Court and without a hearing. No waiver or non-waiver of any such conditions shall diminish the application of the mootness doctrine with respect to the Confirmation of this Plan or any order entered in connection therewith, which doctrine shall apply to the fullest extent of applicable law. 4.3. NON-CONSENSUAL CONFIRMATION. Because Classes 5 and Class 6 are deemed not to have accepted this Plan pursuant to Section 1126(g) of the Code, as to such Classes and any other Class that votes to reject this Plan, the Debtors are seeking confirmation of this Plan in accordance with Section 1129(b) of the Code, either under the terms provided herein 19 or upon such terms as may exist if this Plan is modified in accordance with Section 1127(d) of the Code. ARTICLE V IMPLEMENTATION OF PLAN 5.1. PRE-EFFECTIVE DATE MANAGEMENT AND OPERATION OF DEBTORS. After the Confirmation Date and until the Effective Date, the current directors and officers of each Debtor shall continue to serve in such capacities, subject to such changes as may be determined by the Board of Directors of a Debtor in accordance with the current Bylaws and Certificates of Incorporation of such Debtor (or comparable organizational documents). 5.2. POST-EFFECTIVE DATE COMMITTEE; DISSOLUTION OF COMMITTEE. The Creditors' Committee shall continue to exist after the Confirmation Date until the Effective Date with the same power and authority, and the same ability to retain and compensate professionals, as it had prior to the Confirmation Date. On and as of the Effective Date, the Creditors' Committee shall be reconstituted and shall be comprised of no more than three (3) members of the Creditors' Committee (which may include EX-OFFICIO members) prior to the Effective Date (the "Post-Effective Date Committee"). The members of the Creditors' Committee who are not members of the Post-Effective Date Committee shall be released and discharged of and from all further authority, duties, responsibilities, and obligations related to and arising from and in connection with the Cases. In the event of the death or resignation of any member of the Post-Effective Date Committee after the Effective Date, a majority of the remaining members of the Post-Effective Date Committee shall have the right to designate a successor from among the holders of Allowed Class 3 Claims. If a Post-Effective Date Committee member assigns its Claim or releases the Debtors from payment of all or the balance of its Claim, such act shall constitute a resignation from the Post-Effective Date Committee. Until a vacancy on the Post-Effective Date Committee is filled, the Post-Effective Date Committee shall function in its reduced number. The Reorganized Debtors shall consult with the Post-Effective Date Committee on a regular basis concerning the Reorganized Debtors' investigation, prosecution and proposed settlement of Class 3 Claims and shall provide written reports to the Post-Effective Date Committee on a monthly basis regarding the status of the Claims resolution process. The Reorganized Debtors shall not settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without either the approval of the Post-Effective Date Committee (which shall act by majority vote) or an order of the Bankruptcy Court. Subject to the approval of the Post-Effective Date Committee, the Reorganized Debtors may settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without an order of the Bankruptcy Court. The Reorganized Debtors may settle or compromise any Class 3 Claim for less than the Allowed amount of $25,000 without an order of the Bankruptcy Court and without the approval of the Post-Effective Date Committee. The duties of the Post-Effective Date Committee shall also include services related to any applications for allowance of compensation or reimbursement of expenses of professional persons pending on the Effective Date or filed after the Effective Date (collectively, the "Filed Fee Applications") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to Final Fee Applications. The Reorganized Debtors shall pay (a) the reasonable expenses of the members of the Creditors' Committee between the 20 Confirmation Date and the Effective Date, and the Post-Effective Date Committee (the "Post-Effective Date Committee Expenses") and (b) the reasonable fees and expenses of the professional persons employed by the Post-Effective Date Committee in connection with its duties and responsibilities as set forth in this Plan (the "Post-Effective Date Committee Professional Fees") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to the Filed Fee Applications. The Post-Effective Date Committee Expenses and the Post-Effective Date Committee Professional Fees shall be paid within ten (10) Business Days after submission of a detailed invoice therefor to the Reorganized Debtors. If the Reorganized Debtors dispute the reasonableness of any such invoice, the Reorganized Debtors, the Post-Effective Date Committee or the affected professional may submit such dispute to the Bankruptcy Court for a determination of the reasonableness of such invoice, and the disputed portion of such invoice shall not be paid until the dispute is resolved. The undisputed portion of such reasonable fees and expenses shall be paid as provided herein. The Post-Effective Date Committee shall be dissolved and the members thereof shall be released and discharged of and from further authority, duties, responsibilities and obligations relating to and arising from and in connection with the Cases on the later of (i) the Final Distribution Date and (ii) the date all services related to Filed Fee Applications are completed, and the retention or employment of the Post-Effective Date Committee's professionals shall terminate. 5.3. PRE-EFFECTIVE DATE INJUNCTIONS OR STAYS. All injunctions or stays, whether by operation of law or by order of the Bankruptcy Court, provided for in the Cases pursuant to Sections 105 or 362 of the Code or otherwise that are in effect on the Confirmation Date shall remain in full force and effect until the Effective Date. 5.4. MERGER OF CERTAIN DEBTORS. Effective as of the Effective Date but immediately prior to the discharge of the Debtors described in Section 8.2. of this Plan, each of Dairy Dell, Inc., Bradford Supermarkets, Inc., Abbott Realty Corporation and Big Bear Distribution Company shall be merged with and into The Penn Traffic Company and The Penn Traffic Company shall be the surviving corporation in such merger. Except as otherwise set forth in this Plan, or as modified by appropriate corporate action after the Effective Date, the corporate structure and equity ownership of the Debtors and their subsidiaries shall be unchanged. 5.5. AMENDED CERTIFICATES OF INCORPORATION AND AMENDED BYLAWS. As of the Effective Date, the certificates of incorporation and bylaws of each of the Debtors (or comparable organizational documents) shall be amended as necessary to satisfy the provisions of this Plan and the Code, including, without limitation, the prohibition against the issuance of non-voting equity securities set forth in Section 1123(a)(6) of the Code (respectively, the "Amended Certificates of Incorporation" and the "Amended Bylaws"). The forms of Amended Certificates of Incorporation and Amended Bylaws, to be filed on or before the Exhibit Filing Date as Exhibits 1 and 2 to this Plan, shall become effective on the Effective Date. After the Effective Date, the Amended Certificates of Incorporation and Amended Bylaws shall be subject to such further amendments or modifications as may be made by law, or pursuant to such Amended Certificates of Incorporation and Amended Bylaws. 21 5.6. POST-EFFECTIVE DATE MANAGEMENT AND OPERATION OF REORGANIZED DEBTORS. As of the Effective Date, the directors and officers of each Debtor that is not a Reorganized Debtor shall be terminated. The Debtors shall file Plan Schedule 5.6 with the Bankruptcy Court on or before the Exhibit Filing Date setting forth the offices, the names and affiliations of, and the compensation proposed to be paid to, the individuals intended to serve as directors and officers of each Reorganized Debtor on and after the Effective Date. The initial board of directors of Reorganized Penn Traffic shall consist of seven members, four of which shall be designated by the Creditors' Committee, two of which shall be designated by the holders of a majority of the Senior Notes, and one of which shall be Robert J. Chapman. On and after the Effective Date, each Reorganized Debtor shall be governed in accordance with the Amended Certificates of Incorporation and Amended Bylaws. 5.7. EXIT FINANCING FACILITY. The closing of the Exit Financing Facility shall occur on or before the Effective Date. 5.8. SALE LEASEBACK TRANSACTION. The closing of the Sale Leaseback Transaction shall occur on or before the Effective Date. 5.9. ISSUANCE OF NEW PENN TRAFFIC COMMON SHARES(A) . On the Initial Distribution Date, each Interim Distribution Date and the Final Distribution Date, as applicable, Reorganized Penn Traffic shall issue New Penn Traffic Common Shares for distribution in accordance with this Plan. The issuance of the New Penn Traffic Common Shares and the distribution thereof in accordance with this Plan shall be exempt from registration under applicable securities laws (including without limitation, Section 5 of the Securities Act or any similar state or local law requiring the registration for offer or sale of a security or registration or licensing of an issuer of a security) pursuant to Section 1145(a) of the Code, and may be sold without registration to the extent permitted under Section 1145 of the Code. 5.10. TRANSFER OF INTERCOMPANY CLAIMS. Prior to the discharge of Intercompany Claims, as provided in Section 2.10.(B) of this Plan, the Debtors shall have the right to retain, or effect such transfers and setoffs with respect to, Intercompany Claims as they may deem appropriate for accounting, tax and commercial business purposes, to the fullest extent permitted by applicable law, without affecting the treatment accorded those claims pursuant to Section 2.10. of this Plan. 5.11. MANAGEMENT STOCK INCENTIVE PROGRAM. As soon as practicable after the Effective Date, the Management Stock Incentive Program shall be adopted by the Board of Directors of Reorganized Penn Traffic. 5.12. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS. The Chief Executive Officer, President, Chief Financial Officer, General Counsel, Vice President-Finance & Chief Accounting Officer or Senior Vice President & Chief Marketing Officer of Penn Traffic or any Debtor shall be authorized to execute, deliver, file or record such contracts, instruments, releases, indentures and other agreements or documents and take such actions as may be necessary or appropriate to effectuate and implement the provisions of this Plan, without any further order of the Bankruptcy Court and without the requirement of any further action by any stockholder or director of any of the Debtors or Reorganized Debtors. The Secretary or any Assistant Secretary 22 of each Debtor or Reorganized Debtor shall be authorized to certify or attest to any of the foregoing actions. 5.13. EXEMPTION FROM CERTAIN TRANSFER AND OTHER TAXES. Pursuant to Section 1146 of the Code, (a) the issuance, transfer or exchange of any securities, instruments or documents, (b) the creation of any Lien, mortgage, deed of trust or other security interest, including with respect to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program (c) the making or assignment of any lease or sublease or the making or delivery of any deed or other instrument of transfer under, pursuant to, in furtherance of, or in connection with this Plan, including, without limitation, any deeds, bills of sale or assignments executed in connection with any of the transactions contemplated under this Plan or the reinvesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated in this Plan and (d) the issuance, renewal, modification or securing of indebtedness by such means including with respect to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program, and the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, this Plan, including, without limitation, the Confirmation Order, the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program, shall not be subject to any document recording tax, stamp tax, conveyance fee or other similar tax, mortgage tax, real estate transfer tax, mortgage recording tax or other similar tax or governmental assessment. Consistent with the foregoing, each recorder of deeds or similar official for any county, city or governmental unit in which any instrument hereunder is to be recorded shall, pursuant to the Confirmation Order, be ordered and directed to accept any such instruments or documents without requiring the payment of any filing fees, documentary stamp tax, deed stamps, stamp tax, transfer tax, intangible tax or similar tax. 5.14. CONTINUATION OF PENN TRAFFIC'S PENSION PLANS. Other than the Debtors' Cash Balance Pension Plan, termination of which is a condition precedent to the effectiveness of this Plan pursuant to Section 4.1.(v) hereof, the Reorganized Debtors shall continue to sponsor, administer and maintain the Other Debtor Pension Plans upon the occurrence of the Effective Date, including meeting the minimum funding standards under ERISA and the Internal Revenue Code, paying all PBGC insurance premiums, and administering and operating the Other Debtor Pension Plans in accordance with their terms and ERISA. Nothing in this Plan shall be deemed to discharge, release, or relieve any Person, in any capacity, from any current or future liability, if any, for breaches of fiduciary duty under ERISA with respect to the Cash Balance Pension Plan and the Other Debtor Pension Plans, and PBGC and such Pension Plans shall not be enjoined or precluded from enforcing such liability as a result of this Plan's provisions or confirmation. Notwithstanding the foregoing, after the Effective Date, the Reorganized Debtors shall have the right and authority to terminate, amend or freeze the Other Debtor Pension Plans in accordance with their terms, ERISA, the Internal Revenue Code, and other applicable law. 23 5.15. EMPLOYMENT, RETIREMENT, AND INCENTIVE COMPENSATION PLANS AND PROGRAMS. All employment and severance agreements and policies, and all employee compensation and benefit plans, policies, and programs of the Debtors applicable generally to its employees, including agreements and programs subject to Section 1114 of the Bankruptcy Code, as in effect on the Effective Date, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, life, accidental death, and dismemberment insurance plans, and workers' compensation programs, but not including the Other Debtor Pension Plans, shall be deemed to be, and shall be treated as though they are, executory contracts but only to the extent that rights under such agreements and programs are held by the Debtors or Persons who are the Reorganized Debtors' employees as of the Effective Date, and the Debtors' obligations under such agreements and programs to individuals who are employees of the Debtors on the Effective Date shall survive the Effective Date of the Plan, without prejudice to the Reorganized Debtors' rights under applicable non-bankruptcy law to modify, amend, or terminate the foregoing arrangements, except for (i) such executory contracts or plans deemed rejected pursuant to the Plan (to the extent such rejection does not violate Section 1114 of the Bankruptcy Code) and (ii) such executory contracts or plans as have previously been terminated, or rejected, pursuant to a Final Order, or specifically waived by the beneficiaries of such plans, contracts, or programs. 5.16. SUBSTANTIVE CONSOLIDATION OF THE DEBTORS. On the Confirmation Date, the Debtors shall be substantively consolidated for all purposes related to the Plan, including, without limitation, for purposes of voting, confirmation and distribution. Subject to the occurrence of the Effective Date, (i) all assets and liabilities of the Debtors shall be deemed merged or treated as though they were merged into and with the assets and liabilities of the other Debtors, (ii) no distributions shall be made under the Plan on account of Intercompany Claims among the Debtors and such Claims shall be discharged on the Effective Date in accordance with Section 2.10. of this Plan (but subject to Section 5.10. of this Plan), (iii) no distributions shall be made under the Plan on account of Subsidiary Equity Interests, (iv) all guarantees of the Debtors of the obligations of any other Debtor shall be deemed eliminated so that any claim against any Debtor and any guarantee thereof executed by any other Debtor and any joint or several liability of any of the Debtors shall be deemed to be one obligation of the consolidated Debtors and (v) each and every claim filed or to be filed in the Case of any of the Debtors shall be deemed filed against the consolidated Debtors, and shall be deemed one Claim against and obligation of the consolidated Debtors. Such substantive consolidation shall not (other than for purposes related to the Plan) affect (i) the legal and corporate structure of the Reorganized Debtors, (ii) Subsidiary Equity Interests and (iii) pre and post Petition Date guarantees that are required to be maintained (a) in connection with executory contracts or unexpired leases that were entered into during the Cases or that have been or shall be assumed, (b) pursuant to the Plan, or (c) in connection with the Exit Financing Facility. 5.17. POST-EFFECTIVE DATE TRADE LIEN PROGRAM; CREDITOR SUBORDINATION PROVISION. The Debtors are considering implementing a trade lien program for the benefit of certain vendors who provide inventory and other trade support on credit to the Reorganized Debtors from time to time on and after the Effective Date as well as to the holders of any Allowed Trade Lien Claims (the "Post-Effective Date Trade Lien Program"). The terms and conditions of such Post-Effective Date Trade Lien Program, if any, shall be set forth on Plan 24 Schedule 5.17 to be filed with the Bankruptcy Court on or before the Exhibit Filing Date. Any Post-Effective Date Trade Lien granted in connection with the Post-Effective Date Trade Lien Program and any obligations due and owing in respect thereof shall be junior and subordinate in all respects to the Exit Financing Facility and any liens granted in connection therewith. In addition, except as otherwise provided in the Post-Effective Date Trade Lien Program and as more fully described therein, each Person entitled to receive a distribution under this Plan that becomes a creditor or equity security holder of the Reorganized Debtors shall be deemed to contractually subordinate any present or future claim, right, or other interest it may have in and to any property of the Reorganized Debtors to claims of the vendors secured by any Post-Effective Date Trade Lien; PROVIDED, HOWEVER, that in no case shall the lenders under the Exit Financing Facility be deemed subordinated in this regard. Such contractual subordination shall terminate upon termination or expiration of any Post-Effective Date Trade Lien. 5.18. CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS. Except for purposes of evidencing a right to distributions under this Plan, on the Effective Date all the agreements and other documents evidencing the Senior Note Allowed Claim shall be terminated, cancelled, and of no further force or effect; PROVIDED, HOWEVER, that the Senior Note Indenture shall continue in effect for the purposes of (i) allowing the Senior Note Trustee to make any distributions on account of the Senior Notes pursuant to this Plan and to perform such other necessary administrative functions with respect thereto, and (ii) permitting the Senior Note Trustee to maintain and assert any rights or liens on account of the Senior Note Trustee Claim. ARTICLE VI DISTRIBUTIONS AND CLAIMS ALLOWANCE 6.1. CASH DISTRIBUTIONS. Except as otherwise provided in this Plan, all distributions to be made to the holders of Allowed Claims in Cash under this Plan shall be made on or as soon as practicable after the Initial Distribution Date. 6.2. DISTRIBUTIONS TO HOLDERS OF ALLOWED UNSECURED CLAIMS. As soon as practicable on or after the Effective Date, Reorganized Penn Traffic shall issue New Penn Traffic Common Shares, and make available to the Disbursing Agent New Penn Traffic Common Shares, in a number sufficient to make distributions on behalf of the Debtors to holders of Allowed Class 3 Claims in accordance with Sections 2.8.(C) and 6.2.(C) and (F) of this Plan. On any Interim Distribution Date and on the Final Distribution Date, as applicable, Reorganized Penn Traffic shall issue New Penn Traffic Common Shares, and make available to the Disbursing Agent New Penn Traffic Common Shares, in a number sufficient to make distributions on behalf of the Debtors to holders of Allowed Class 3 Claims in accordance with Sections 2.8.(C), 6.2.(D), (E) and (F) of this Plan. The Disbursing Agent shall make distributions of New Penn Traffic Common Shares to holders of Allowed Class 3 Claims as follows: (A) As soon as practicable after the Effective Date, Reorganized Penn Traffic shall cause the Disbursing Agent to send a notice and a transmittal form (which shall specify that delivery shall be effected and risk of loss and title to the Senior Notes shall pass, except to the extent that the Senior Notes held by holders are evidenced by electronic entry, only 25 upon delivery of the Senior Notes to the Senior Note Trustee, and shall be in such form and have such other reasonable provisions as Reorganized Penn Traffic and the Senior Note Trustee may reasonably specify) to each holder of record of a Senior Note as of the Distribution Record Date advising such holder of the effectiveness of this Plan and the procedure for surrendering to the Senior Note Trustee such Senior Note in exchange for the New Penn Traffic Common Shares issuable to it pursuant to Section 2.8.(C) of this Plan. At the close of business on the Distribution Record Date, the transfer ledgers in respect of the Senior Notes shall be closed, and there shall be no further changes in the record holders of the Senior Notes. The Reorganized Debtors, the Disbursing Agent and the Senior Note Trustee shall have no obligation to recognize any transfer of Senior Notes occurring after the Distribution Record Date. The Reorganized Debtors, the Disbursing Agent and the Senior Note Trustee shall be entitled instead to recognize and deal for all purposes hereunder only with those record holders stated on the transfer ledgers as of the close of business on the Distribution Record Date. If a holder of a Senior Note is unable to surrender a Senior Note because it has been destroyed, lost or stolen, such holder may receive a distribution with respect to such Senior Note upon request to the Senior Note Trustee in an acceptable form with: (i) proof of such holder's title to such Senior Note; (ii) proof of the destruction or theft of such Senior Note, or an affidavit to the effect that the same has been lost and after diligent search cannot be found; and (iii) such indemnification as may reasonably be required by the Reorganized Debtors and the Senior Note Trustee to indemnify the Reorganized Debtors, the Disbursing Agent, the Senior Note Trustee, and all other persons deemed appropriate by the Senior Note Trustee and the Reorganized Debtors against any loss, action, suit or other claim whatsoever that may be made as a result of such holder's receipt of a distribution on account of such Senior Note under this Plan. Any holder that fails to comply with this Section 6.2.(A) before the first anniversary of the Effective Date shall be deemed to have forfeited all rights and claims and may not participate in any distribution under this Plan. (B) As soon as practicable after the Effective Date, Reorganized Penn Traffic shall cause the Disbursing Agent to send a notice to each holder of an Allowed Class 3 Claim and each holder of an Allowed Class 4 Claim advising such holder of the effectiveness of this Plan and requesting the completion and return of the Taxpayer Identification Request Form. The Class 3 or Class 4 distribution of any holder of an Allowed Class 3 Claim or an Allowed Class 4 Claim, as the case may be, who fails to return the Taxpayer Identification Request Form within 120 days following the mailing by the Disbursing Agent of the Taxpayer Identification Request Form shall be automatically deemed Unclaimed Property pursuant to Section 6.3.(H) of this Plan at the expiration of such 120 day period without further order of the Bankruptcy Court. (C) Subject to Section 6.2.(B) hereof, on the Initial Distribution Date, the Disbursing Agent shall make a PRO RATA distribution (determined in accordance with Section 6.2.(F) of this Plan) of the New Penn Traffic Common Shares allocable to Allowed Claims held by holders of Class 3 Claims as of the Distribution Record Date. Distributions of the New Penn Traffic Common Shares on account of the Senior Note Allowed Claim shall be made to the Senior Note Trustee. The Senior Note Trustee shall, in turn, as soon as is practicable, make distributions to the holders of the Senior Notes pursuant to the terms of the 26 Senior Note Indenture and the Plan so long as the holders are in compliance with Sections 6.2.(A) and (B) above. (D) Subject to Sections 6.2.(A) and (B) hereof, on any Interim Distribution Date, the Disbursing Agent shall make PRO RATA distributions (determined in accordance with Section 6.2.(F) of this Plan) of New Penn Traffic Common Shares to holders of Allowed Class 3 Claims pursuant to and consistent with resolutions of Disputed Claims since the Initial Distribution Date, or the previous Interim Distribution Date, as the case may be. (E) Subject to Sections 6.2.(A) and (B) hereof, on the Final Distribution Date, the Disbursing Agent shall make a PRO RATA distribution (determined in accordance with Section 6.2.(F) of this Plan) of New Penn Traffic Common Shares to holders of Allowed Class 3 Claims pursuant to and consistent with resolutions of Disputed Claims since the Initial Distribution Date (if there have been no distributions since the Initial Distribution Date), or the previous Interim Distribution Date, as the case may be. (F) The PRO RATA share of New Penn Traffic Common Shares distributable to any holder of an Allowed Class 3 Claim under Section 6.2.(C), 6.2.(D) or 6.2.(E) hereof shall equal (i) 10,000,000 multiplied by (ii) a fraction, the numerator of which is equal to such holder's Allowed Class 3 Claims as of the relevant distribution date under Section 6.2.(C), 6.2.(D) or 6.2.(E) hereof, as applicable, and the denominator of which is equal to 110% of the total amount of Allowed Class 3 Claims as of the Initial Distribution Date; PROVIDED, that for purposes of calculating such denominator, all Disputed Claims in Class 3 as of the Initial Distribution Date shall be treated as though such Claims were Allowed Claims in the Face Amount of such Claims as of the Distribution Record Date, regardless of whether such Claims are subsequently disallowed in whole or in part. 6.3. MISCELLANEOUS DISTRIBUTION PROVISIONS. (A) FRACTIONAL PLAN SECURITIES. Notwithstanding any other provision of this Plan, only whole numbers of shares of New Penn Traffic Common Shares shall be issued. When any distribution on account of an Allowed Claim would otherwise result in the issuance of a number of shares of New Penn Traffic Common Shares that are not a whole number, the actual distribution of such Shares shall be rounded to the next higher or lower whole number of Shares as follows: (i) fractions equal to or greater than 1/2 shall be rounded to the next higher whole number; and (ii) fractions less than 1/2 shall be rounded to the next lower number. No consideration shall be provided in lieu of fractional shares that are rounded down. (B) DISTRIBUTIONS ON NON-BUSINESS DAYS. Any payment or distribution due on a day other than a Business Day shall be made, without interest, on the next Business Day. (C) POST-CONSUMMATION EFFECT OF EVIDENCES OF CLAIMS OR INTERESTS. Notes, stock certificates and other evidence of Claims against or Interests in the Debtors shall, effective on the Effective Date, represent only the right to participate in the distributions contemplated by this Plan, if any, and shall not be valid or effective for any other purpose. 27 (D) NO DISTRIBUTION IN EXCESS OF ALLOWED AMOUNT OF CLAIM. Notwithstanding anything to the contrary herein, if any portion of a Claim is a Disputed Claim, no payment or distribution provided hereunder shall be made on account of the portion of such Claim that is a Disputed Claim unless and until such Disputed Claim becomes an Allowed Claim, but the payment or distribution provided hereunder shall be made on account of the portion of such Claim that is an Allowed Claim. (E) DISPUTED PAYMENTS. If any dispute arises as to the identity of the holder of an Allowed Claim entitled to receive any distribution under this Plan, the Reorganized Debtors may retain such distribution until its disposition is determined by a Final Order or written agreement among the interested parties to such dispute. (F) DELIVERY OF DISTRIBUTIONS. Subject to Bankruptcy Rule 9010 and Sections 6.2.(A) and (B) hereof, all distributions to any holder of an Allowed Claim, except the holder of a Senior Note Allowed Claim, shall be made at the address of such holder as set forth on the Schedules filed with the Bankruptcy Court or on the books and records of the Debtors or their agents, unless the Debtors have been notified in writing of a change of address, including, without limitation, by the filing of a proof of claim by such holder that contains an address for such holder different from the address reflected on such Schedules for such holder. All distributions to any holder of a Senior Note Allowed Claim shall be made to the Senior Note Trustee. In the event that any distribution to any holder is returned as undeliverable, no further distributions shall be made in respect of such Claim unless and until the Disbursing Agent or the Senior Note Trustee is notified in writing of such Claim holder's then current address, at which time such distribution shall be made to such holder without interest; provided that such distributions shall be deemed Unclaimed Property at the expiration of one hundred twenty (120) days after the distribution date applicable to such distribution. (G) ESTIMATION OF DISPUTED CLAIMS. The aggregate Face Amount of (a) Disputed Claims and (b) Allowed Claims shall set the maximum allowable aggregate amount of Claims in Class 3. The existence of a Disputed Claim in Class 3 shall not impair or impede the making of a distribution to Allowed Claims in such Class or any other Class. If the Allowed amount of any particular Disputed Claim is reconsidered under Section 502(j) of the Code and Bankruptcy Rule 3008 and/or is Allowed in an amount that is greater than the estimated amount of such Claim, or the ultimately Allowed amount of all Disputed Claims in Class 3 is greater than the estimated aggregate Face Amount of such Claims, no claimant shall have recourse against the Reorganized Debtors (or any property thereof), any distributions made to a creditor in any other Class herein, or any distribution previously made on account of any Allowed Claim (however, nothing herein shall modify any right of a holder of a reconsidered Claim under the penultimate sentence of Section 502(j) of the Code). (H) UNCLAIMED PROPERTY. Holders of Allowed Class 3 Claims and Allowed Class 4 Claims to Unclaimed Property shall cease to be entitled thereto, and such Unclaimed Property shall revert to the Reorganized Debtors. (I) VOTING OF NEW PENN TRAFFIC COMMON SHARES. New Penn Traffic Common Shares that are Unclaimed Property or reserved for Disputed Claims shall not be voted at any meeting of the stockholders of Reorganized Penn Traffic. 28 (J) SETOFFS AND RECOUPMENT. The Reorganized Debtors may, but shall not be required to, setoff or recoup against any Allowed Claim and the distributions to be made pursuant to this Plan on account of such Claim, claims of any nature that the Debtors or Reorganized Debtors may have against the holder of such Allowed Claim; PROVIDED, HOWEVER, that neither the failure to effect such a setoff or recoupment nor the allowance of any Claim against the Debtors or the Reorganized Debtors shall constitute a waiver or release by the Debtors or the Reorganized Debtors of any setoff or recoupment claim that the Debtors or the Reorganized Debtors may possess against such holder. (K) COMPLIANCE WITH TAX REQUIREMENTS. In connection with this Plan, to the extent applicable, the Reorganized Debtors shall comply with all tax withholding and reporting requirements imposed on them by any governmental unit, and all distributions pursuant to this Plan that may be necessary or appropriate to comply with such withholding and reporting requirements. Notwithstanding any other provision of this Plan, each Person that has received any distribution pursuant to this Plan shall have sole and exclusive responsibility for the satisfaction and payment of any tax obligation imposed by any governmental unit, including income, withholding and other tax obligations, on account of such distribution. (L) DISBURSING AGENT. All distributions under the Plan shall be made by the Reorganized Debtors or the Disbursing Agent or such other entity as may be designated by the Reorganized Debtors as a Disbursing Agent, in consultation with the Post-Effective Date Committee, including the Senior Note Trustee. No Disbursing Agent, including the Senior Note Trustee, shall be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court; and, in the event that the Disbursing Agent or the Senior Note Trustee is so otherwise ordered, all cost and expenses of procuring any such bond or surety shall be borne by the Reorganized Debtors. The amount of any reasonable fees and expenses incurred by the Disbursing Agent and the Senior Note Trustee on or after the Effective Date (including, without limitation, taxes) and any reasonable compensation and expense reimbursement claims (including, without limitation, reasonable attorney fees and expenses) made by the Disbursing Agent and the Senior Note Trustee in making distributions under the Plan shall be paid in Cash by the Reorganized Debtors. 6.4. PROCEDURE FOR DETERMINATION OF CLAIMS AND INTERESTS. (A) BAR DATE FOR CERTAIN ADMINISTRATIVE CLAIMS. All applications for final compensation of professional persons employed by the Debtors or the Creditors' Committee pursuant to orders entered by the Bankruptcy Court and on account of services rendered prior to the Effective Date, and all other requests for payment of Administrative Claims (except for ordinary course trade debt and customer deposits and credits incurred in the ordinary course of business after the Petition Date) shall be served on the Reorganized Debtors and Post-Effective Date Committee in accordance with Section 9.10. of this Plan and filed with the Bankruptcy Court, no later than 25 days after the Effective Date. Any such claim that is not served and filed within this time period shall be discharged and forever barred. Objections to any such application must be filed within 15 days after filing thereof. (B) OBJECTIONS TO CLAIMS. Objections to any Claim filed by any party other than the Debtors (other than Administrative Claims governed by Section 6.4.(A) of this 29 Plan) must be filed no later than twenty (20) days before the Effective Date; PROVIDED, HOWEVER, that the Reorganized Debtors and only the Reorganized Debtors may file objections to Claims subsequent to the Effective Date through and including sixty (60) days after the Effective Date. In accordance with Section 6.3.(D) of this Plan, payment or distribution shall be made on account of all or any portion of such Claim that is an Allowed Claim. To the extent any property is distributed to an entity on account of a Claim that is not an Allowed Claim, such property shall be held in trust for and shall promptly be returned to the Reorganized Debtors. On and after the Effective Date, the Reorganized Debtors shall have authority to continue to prosecute, settle or withdraw objections to Claims and shall be entitled to compromise or settle any Disputed Claim in accordance with Section 5.2. of this Plan. ARTICLE VII PENN TRAFFIC CREDITOR TRUST 7.1. APPOINTMENT OF TRUSTEE. The Trustee for the Penn Traffic Creditor Trust shall be designated by the Creditors' Committee, subject to the approval of the Bankruptcy Court and the consent of the Debtors, which consent shall not be unreasonably withheld. The Trustee shall be independent of the Debtors and the Reorganized Debtors. The Creditors' Committee shall file a notice on a date that is not less than ten (10) days prior to the Confirmation Hearing designating the Person whom it has selected as Trustee and seeking approval of such designation. The Person designated as Trustee shall file an affidavit demonstrating that such Person is disinterested as defined by Section 101(14) of the Bankruptcy Code. If approved by the Bankruptcy Court, the Person so designated shall become the Trustee on the Effective Date. The Trustee shall have and perform all of the duties, responsibilities, rights and obligations set forth in the Trust Agreement. 7.2. TRANSFER OF TRUST ASSETS TO THE PENN TRAFFIC CREDITOR TRUST. (A) On the Effective Date, the Debtors' Estates shall transfer and shall be deemed to have irrevocably transferred the Trust Assets to the Penn Traffic Creditor Trust, for and on behalf of the beneficiaries of the Trust, with no reversionary interest in the Debtors or the Reorganized Debtors. The foregoing transfer of Trust Assets (a) is a legal, valid, and effective transfer of property, (b) shall not be affected by any provision in any contract or other agreement between the Debtors and any Person, including without limitation, any Person that is or becomes a defendant with respect to any Trust Claims asserted by the Penn Traffic Creditor Trust, purporting to prohibit the assignment of claims by any of the Debtors or their Estates, and such anti-assignment provisions shall be deemed void as they relate to the transfer of Trust Assets, (c) shall vest the Penn Traffic Creditor Trust with good title to such property, free and clear of all liens, charges, Claims, encumbrances, or interests, except as expressly provided in this Plan or the Confirmation Order, (d) does not and shall not constitute avoidable transfers under the Bankruptcy Code or under applicable non-bankruptcy law, (e) does not and shall not subject the Penn Traffic Creditor Trust to any liability by reason of such transfer under the Bankruptcy Code or under applicable non-bankruptcy law, including, without limitation, any laws affecting successor or transferee liability, or a reduction in any claim by way of setoff, recoupment or any other similar defenses or counterclaims. 30 (B) Upon such transfer, the Debtors, the Debtors' Estates, the Disbursing Agent and the Reorganized Debtors shall have no other or further rights or obligations with respect thereto. Notwithstanding the foregoing, the Reorganized Debtors shall make available to the Trustee and the Trustee Professionals (as defined below) reasonable access during normal business hours, upon reasonable notice, to personnel and books and records of the Debtors and/or Reorganized Debtors to enable the Trustee to perform the Trustee's tasks under the Trust Agreement and this Plan, and the Debtors and the Reorganized Debtors shall provide the Trustee, the Trust Advisory Board and/or the Trust Professionals with copies of all documents delivered to the United States Securities and Exchange Commission or any other governmental agency, department or unit in connection with the subject matter of the Trust Claims and shall provide reasonable access to evidence gathered and work product developed in connection with the subject matter of the Trust Claims, as more specifically set forth in the Trust Agreement; PROVIDED, HOWEVER, that the Reorganized Debtors shall not be required to incur expenditures in response to such requests determined by them to be unreasonable. The Reorganized Debtors shall not be entitled to compensation or reimbursement (including reimbursement for professional fees) with respect to fulfilling their obligations as set forth in this Section. The Bankruptcy Court retains jurisdiction to determine the reasonableness of either a request for assistance and/or a related expenditure. Any requests for assistance shall not interfere with the Reorganized Debtors' business operations. (C) On the Effective Date, the Penn Traffic Creditor Trust shall succeed, for the benefit of beneficiaries of the Penn Traffic Creditor Trust, to all of the rights, privileges and immunities with respect to the Trust Assets including, without limitation, the attorney-client and all other evidentiary privileges, and the time periods in which Trust Claims may be brought under Sections 108 and 546 of the Bankruptcy Code or otherwise. 7.3. THE PENN TRAFFIC CREDITOR TRUST. (A) Without any further action of the directors or shareholders of the Debtors, on the Effective Date, the Trust Agreement, substantially in the form of Exhibit 3 to this Plan, shall become effective. The Trustee shall accept the Penn Traffic Creditor Trust and sign the Trust Agreement on the Effective Date and the Penn Traffic Creditor Trust shall then be deemed created and effective. (B) Interests in the Penn Traffic Creditor Trust shall be uncertificated and shall be non- transferable except upon death of the interest holder or by operation of law. Holders of interests in the Penn Traffic Creditor Trust shall have no voting rights with respect to such interests. Unless the Trustee asserts an insurance claim in writing, or commences an action or a proceeding asserting a Trust Claim within three (3) years from the Effective Date, in which case the Trust shall continue until such action or proceeding is concluded, the Penn Traffic Creditor Trust shall have a term of three (3) years from the Effective Date, without prejudice to the rights of the Trust Advisory Board to seek Bankruptcy Court approval to extend such term conditioned upon the Penn Traffic Creditor Trust's not then becoming subject to the Exchange Act (the "Trust Term"). The terms of the Trust may be amended by the Trustee or the Reorganized Debtors to the extent necessary to ensure that the Trust shall not become subject to the Exchange Act. 31 (C) The Trustee shall have full authority to take any steps necessary to administer the Trust Agreement, including, without limitation, the duty and obligation to liquidate Trust Assets, to make distributions therefrom in accordance with the provisions of this Plan and, if authorized by majority vote of those members of the Trust Advisory Board authorized to vote, to pursue and settle any Trust Claims. Upon such assignment, the Trustee, on behalf of the Penn Traffic Creditor Trust, shall assume and be responsible for any responsibilities, duties, and obligations of the Debtors with respect to the subject matter of the assignments, and the Debtors, the Disbursing Agent, and the Reorganized Debtors shall have no further rights or obligations with respect thereto. (D) All costs and expenses associated with the administration of the Penn Traffic Creditor Trust, including those rights, obligations and duties described in this Plan, shall be the responsibility of and paid by the Penn Traffic Creditor Trust. Notwithstanding the preceding sentence, the Reorganized Debtors shall contribute the following to the Penn Traffic Creditor Trust to be utilized to pay the costs and expenses associated with the administration of the Penn Traffic Creditor Trust (the "Funding Contributions"): (i) $300,000 on the Effective Date and (ii) four (4) quarterly installments in the amount of $50,000 each to be paid by the Reorganized Debtors to the Penn Traffic Creditor Trust beginning on the three (3) month anniversary of the Effective Date ((i) and (ii) above, collectively, the "Initial Installments"). If the Reorganized Debtors fail to pay any of the Initial Installments within five (5) business days after written notice of the Trust to the Reorganized Debtors, all remaining Initial Installments shall become immediately due and payable to the Penn Traffic Creditor Trust. The Trustee shall have the right to seek an order of the Bankruptcy Court requiring the Reorganized Debtors to make additional Funding Contributions in excess of the foregoing Initial Installments at any time during the Trust Term in the maximum aggregate amount of $500,000 in excess of the Initial Installments. As of the termination of the Penn Traffic Creditor Trust, any unused Funding Contributions shall be disposed of at the discretion of the Trustee, as authorized by the Trust Advisory Board, by majority vote. (E) The Trustee may retain such law firms, accounting firms, experts, advisors, consultants, investigators, appraisers, auctioneers or other professionals as it may deem necessary (collectively, the "Trustee Professionals"), in its sole discretion, to aid in the performance of its responsibilities pursuant to the terms of this Plan including, without limitation, the liquidation and distribution of Trust Assets. (F) For federal income tax purposes, it is intended that the Penn Traffic Creditor Trust be classified as a liquidating trust under Section 301.7701 4 of the Procedure and Administration Regulations and as a grantor trust subject to the provisions of Subchapter J, Subpart E of the Internal Revenue Code of 1986, as amended, that is owned by its beneficiaries as grantors. Accordingly, for federal income tax purposes, it is intended that the beneficiaries be treated as if they had received a distribution of an undivided interest in the Trust Assets and then contributed such interests to the Penn Traffic Creditor Trust. (G) The Trustee shall be responsible for filing all federal, state and local tax returns for the Penn Traffic Creditor Trust if necessary. 32 7.4. THE TRUST ADVISORY BOARD. (A) The Trust Advisory Board shall be comprised of three (3) members which shall be designated by the Creditors' Committee. The Creditors' Committee shall give the Debtors written notice of the identities of such members and file such notice with the Bankruptcy Court on a date that is not less than ten (10) days prior to the Confirmation Hearing; PROVIDED, HOWEVER, that if the Creditors' Committee fails to file and give such notice, Penn Traffic shall designate the members of the Trust Advisory Board by announcing their identities at the Confirmation Hearing. The Trustee shall consult regularly with the Trust Advisory Board when carrying out the purpose and intent of the Penn Traffic Creditor Trust. Members of the Trust Advisory Board shall be entitled to reimbursement of the reasonable and necessary expenses incurred by them in carrying out the purpose of the Trust Advisory Board, which shall be payable by the Penn Traffic Creditor Trust. (B) In the case of an inability or unwillingness of any member of the Trust Advisory Board to serve, such member may be replaced by designation of the remaining members of the Trust Advisory Board. If any position on the Trust Advisory Board remains vacant for more than thirty (30) days, such vacancy shall be filled within fifteen (15) days thereafter by the designation of the Trustee without the requirement of a vote by the other members of the Trust Advisory Board until a vacancy on the Trust Advisory Board is filled, the Trust Advisory Board shall function in its reduced number. (C) Upon the certification by the Trustee that all Trust Assets have been distributed, abandoned or otherwise disposed of, the members of the Trust Advisory Board shall resign their positions, whereupon they shall be discharged from further duties and responsibilities. (D) The Trust Advisory Board shall, by majority vote, approve all settlements of Trust Claims which the Trustee or any member of the Trust Advisory Board may propose, PROVIDED, HOWEVER, that (i) no member of the Trust Advisory Board may cast a vote with respect to any Trust Claim to which it is a party; and (ii) the Trustee may seek Bankruptcy Court approval of a settlement of a Trust Claim if the Trust Advisory Board fails to act on a proposed settlement of such Trust Claim within thirty (30) days of receiving notice of such proposed settlement by the Trustee or as otherwise determined by the Trustee. (E) The Trust Advisory Board may, by majority vote, authorize the Trustee to invest the corpus of the Trust in prudent investments other than those described in Section 345 of the Bankruptcy Code. (F) The Trust Advisory Board may remove the Trustee in its discretion. In the event the requisite approval is not obtained, the Trustee may be removed by the Bankruptcy Court for cause shown. In the event of the resignation or removal of the Trustee, the Trust Advisory Board shall, by majority vote, designate a person to serve as successor Trustee. The successor Trustee shall file an affidavit demonstrating that such Person is disinterested as defined by Section 101(14) of the Bankruptcy Code. 33 (G) Notwithstanding anything to the contrary in this Plan, neither the Trust Advisory Board nor any of its members, designees, counsel, financial advisors or any duly designated agent or representatives of any such party shall be liable for the act, default or misconduct of any other member of the Trust Advisory Board, nor shall any member be liable for anything other than such member's own gross negligence or willful misconduct. The Trust Advisory Board may, in connection with the performance of its duties, and in its sole and absolute discretion, consult with its counsel, accountants or other professionals, and shall not be liable for anything done or omitted or suffered to be done in accordance with such advice or opinions. If the Trust Advisory Board determines not to consult with its counsel, accountants or other professionals, it shall not be deemed to impose any liability on the Trust Advisory Board, or its members and/or designees. (H) The Trust Advisory Board shall govern its proceedings through the adoption of bylaws, which the Trust Advisory Board shall adopt by majority vote. No provision of such bylaws shall supersede any express provision of this Plan or the Trust Agreement. 7.5. DISTRIBUTIONS OF TRUST RECOVERIES. Pro-rata distributions of the Trust Recoveries to holders of Allowed Unsecured Claims in accordance with their interests in the Penn Traffic Creditor Trust as set forth in this Plan may be made at least semi-annually beginning with a calendar quarter that is not later than the end of the second calendar quarter after the Effective Date; PROVIDED, HOWEVER, that the Trustee shall not be required to make any such semiannual distribution in the event that the aggregate proceeds and income available for distribution to such Claimholders is not sufficient, in the Trustee's discretion (after consultation with the Trust Advisory Board) to economically distribute monies, and in any case, in connection with any interim (as opposed to final) distribution, the Trustee shall retain at least the amount of funds paid to the Penn Traffic Creditor Trust pursuant to Section 7.3.(D) of this Plan. The Trustee shall make diligent and continuing efforts to prosecute or settle the Trust Claims, make timely distributions, and not unduly prolong the duration of the Penn Traffic Creditor Trust. For the purpose of calculating the amount of the Trust Recoveries to be distributed to holders of Allowed Class 3 Claims, all Disputed Claims in Class 3 shall be treated as though such claims shall be Allowed Claims in the Face Amount of such claims on the relevant distribution date. ARTICLE VIII EFFECT OF THIS PLAN ON CLAIMS AND INTERESTS 8.1. REVESTING OF ASSETS. Except as otherwise explicitly provided in this Plan, on the Effective Date, all property of the Estates, to the fullest extent of Section 541 of the Code, and any and all other rights and assets of the Debtors of every kind and nature shall revest in the Reorganized Debtors free and clear of all Liens, Claims and Interests other than (i) those Liens, Claims and Interests retained or created pursuant to this Plan or any document entered into in connection with the transactions described in this Plan, (ii) Liens that have arisen subsequent to the Petition Date on account of taxes that arose subsequent to the Petition Date, and (iii) Trust Assets, which shall be transferred to the Penn Traffic Creditor Trust pursuant to Article VII of this Plan. 34 8.2. DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS. As of the Effective Date, except as provided in the Confirmation Order, the rights afforded under this Plan and the treatment of Claims and Interests under this Plan shall be in exchange for and in complete satisfaction, discharge and release of all Claims and satisfaction or termination of all Interests, including any interest accrued on Claims from and after the Petition Date. Except as otherwise provided in this Plan, including Section 5.14., or the Confirmation Order, Confirmation shall, as of the Effective Date: (i) discharge the Debtors from all Claims or other debts that arose before the Effective Date, and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Code, whether or not (x) a proof of claim based on such debt is filed or deemed filed pursuant to Section 501 of the Code, (y) a Claim based on such debt is Allowed pursuant to Section 502 of the Code or (z) the holder of a Claim based on such debt has accepted this Plan; and (ii) satisfy, terminate or cancel all Interests and other rights of equity security holders in the Debtors. As of the Effective Date, except as otherwise provided in this Plan, including Section 5.14. or the Confirmation Order, all Persons shall be precluded from asserting against the Debtors or the Reorganized Debtors, or their respective successors or property, any other or further Claims, demands, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction or other activity of any kind or nature that occurred prior to the Effective Date. In accordance with the foregoing, except as provided in this Plan, including Section 5.14., or the Confirmation Order, the Confirmation Order shall be a judicial determination, as of the Effective Date, of discharge of all such Claims and other debts and liabilities against the Debtors and satisfaction, termination or cancellation of all Interests and other rights of equity security holders in the Debtors, pursuant to Sections 524 and 1141 of the Code, and such discharge shall void any judgment obtained against the Debtors or the Reorganized Debtors at any time, to the extent that such judgment relates to a discharged Claim. 8.3. INJUNCTIONS. (A) EXCEPT AS OTHERWISE PROVIDED IN THIS PLAN, INCLUDING SECTION 5.14., OR THE CONFIRMATION ORDER, AS OF THE EFFECTIVE DATE, ALL PERSONS THAT HAVE HELD, CURRENTLY HOLD OR MAY HOLD A CLAIM OR OTHER DEBT OR LIABILITY THAT IS DISCHARGED OR AN INTEREST OR OTHER RIGHT OF AN EQUITY SECURITY HOLDER THAT IS TERMINATED PURSUANT TO THE TERMS OF THIS PLAN ARE PERMANENTLY ENJOINED FROM TAKING ANY OF THE FOLLOWING ACTIONS ON ACCOUNT OF ANY SUCH DISCHARGED CLAIMS, DEBTS OR LIABILITIES OR TERMINATED INTERESTS OR RIGHTS: (I) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING AGAINST THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; (II) ENFORCING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; (III) CREATING, PERFECTING OR ENFORCING ANY LIEN OR ENCUMBRANCE AGAINST THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; (IV) ASSERTING A SETOFF, RIGHT OF SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; AND (V) COMMENCING OR CONTINUING ANY ACTION, IN ANY MANNER, IN ANY PLACE THAT DOES NOT COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THIS PLAN. (B) EXCEPT AS OTHERWISE PROVIDED IN THIS PLAN, INCLUDING SECTION 5.14., AS OF THE EFFECTIVE DATE, ALL PERSONS THAT HAVE HELD, CURRENTLY HOLD OR MAY HOLD A CLAIM, DEMAND, DEBT, RIGHT, CAUSE OF ACTION OR LIABILITY THAT IS RELEASED PURSUANT TO 35 THIS PLAN ARE PERMANENTLY ENJOINED FROM TAKING ANY OF THE FOLLOWING ACTIONS ON ACCOUNT OF SUCH RELEASED CLAIMS, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION OR LIABILITIES: (I) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING; (II) ENFORCING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER ANY JUDGMENT, AWARD, DECREE OR ORDER; (III) CREATING, PERFECTING OR ENFORCING ANY LIEN OR ENCUMBRANCE; (IV) ASSERTING A SETOFF, RIGHT OF SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO ANY RELEASED ENTITY; AND (V) COMMENCING OR CONTINUING ANY ACTION, IN ANY MANNER, IN ANY PLACE THAT DOES NOT COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THIS PLAN. (C) IN EXCHANGE FOR THE DISTRIBUTIONS PURSUANT TO THIS PLAN, EXCEPT AS OTHERWISE PROVIDED IN THIS PLAN, INCLUDING SECTION 5.14., EACH HOLDER OF AN ALLOWED CLAIM RECEIVING SUCH DISTRIBUTION PURSUANT TO THIS PLAN SHALL BE DEEMED TO HAVE SPECIFICALLY CONSENTED TO THE INJUNCTIONS SET FORTH IN THIS SECTION 8.3. 8.4. LIMITATION OF LIABILITY. SUBJECT IN ALL RESPECTS TO SECTION 8.7. OF THIS PLAN, NONE OF THE DEBTORS, THE REORGANIZED DEBTORS, THE CREDITORS' COMMITTEE, THE POST-EFFECTIVE DATE COMMITTEE, THE TRUST ADVISORY BOARD, THE PRE-PETITION SECURED LENDERS, THE DIP LENDERS, THE SENIOR NOTE TRUSTEE NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, MEMBERS, ATTORNEYS, INVESTMENT BANKERS, RESTRUCTURING CONSULTANTS AND FINANCIAL ADVISORS, NOR ANY OTHER PROFESSIONAL PERSONS EMPLOYED BY ANY OF THEM (COLLECTIVELY, THE "EXCULPATED PERSONS"), SHALL HAVE OR INCUR ANY LIABILITY TO ANY PERSON FOR ANY ACT TAKEN OR OMISSION FROM AND AFTER THE PETITION DATE IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS, THE FORMULATION, NEGOTIATION, IMPLEMENTATION, CONFIRMATION OR CONSUMMATION OF THIS PLAN, THE FIRST AMENDED DISCLOSURE STATEMENT OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED IN CONNECTION WITH THIS PLAN. THE EXCULPATED PERSONS SHALL HAVE NO LIABILITY TO ANY DEBTOR, HOLDER OF A CLAIM, HOLDER OF AN INTEREST, OTHER PARTY IN INTEREST IN THE CASES OR ANY OTHER PERSON FOR ACTIONS TAKEN OR NOT TAKEN IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS, THIS PLAN OR THE PROPERTY TO BE DISTRIBUTED UNDER THIS PLAN, INCLUDING, WITHOUT LIMITATION, FAILURE TO OBTAIN CONFIRMATION OF THIS PLAN OR TO SATISFY ANY CONDITION OR CONDITIONS, OR REFUSAL TO WAIVE ANY CONDITION OR CONDITIONS, TO THE OCCURRENCE OF THE EFFECTIVE DATE, AND IN ALL RESPECTS SUCH EXCULPATED PERSONS SHALL BE ENTITLED TO RELY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND RESPONSIBILITIES IN THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS AND UNDER THIS PLAN. NOTHING IN THIS PARAGRAPH SHALL EXCULPATE, DISCHARGE, RELEASE OR RELIEVE ANY PERSON IN A MANNER CONTRARY TO THE LANGUAGE OF SECTION 5.14. OF THIS PLAN. 8.5. RELEASES. (A) SUBJECT IN ALL RESPECTS TO SECTION 8.7. OF THIS PLAN, ON THE EFFECTIVE DATE, THE DEBTORS AND THE REORGANIZED DEBTORS ON BEHALF OF THEMSELVES AND AS REPRESENTATIVES OF THE ESTATES, RELEASE UNCONDITIONALLY, AND ARE HEREBY DEEMED TO RELEASE UNCONDITIONALLY, (I) EACH OF THE DEBTORS' OFFICERS AND DIRECTORS WHO SERVED AT ANY TIME DURING THE CASES, (II) ANY PERSON THAT ELECTED SUCH DIRECTORS TO THE EXTENT OF ALLEGED LIABILITY FOR ACTIONS OR INACTIONS OF SUCH DIRECTORS, (III) THE MEMBERS OF THE CREDITORS' COMMITTEE, (IV) THE DIP LENDERS, (V) THE PRE-PETITION SECURED LENDERS, (VI) THE SENIOR NOTE TRUSTEE AND (VII) THE ATTORNEYS, INVESTMENT BANKERS, RESTRUCTURING CONSULTANTS AND FINANCIAL 36 ADVISORS OF THE FOREGOING, INCLUDING THE DEBTORS AND THE REORGANIZED DEBTORS, FROM ANY AND ALL CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, RIGHTS, CAUSES OF ACTION AND LIABILITIES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THOSE ARISING UNDER THE CODE), WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, BASED ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE ON OR AFTER THE PETITION DATE THROUGH AND INCLUDING THE EFFECTIVE DATE IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS, THE FORMULATION, NEGOTIATION, IMPLEMENTATION, CONFIRMATION OR CONSUMMATION OF THIS PLAN, THE FIRST AMENDED DISCLOSURE STATEMENT OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED IN CONNECTION WITH THIS PLAN; PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION 8.5.(A) SHALL (I) BE CONSTRUED TO RELEASE OR EXCULPATE ANY PERSON OR ENTITY FROM FRAUD, WILLFUL MISCONDUCT OR CRIMINAL CONDUCT OR (II) LIMIT THE LIABILITY OF THE PROFESSIONALS OF THE DEBTORS, THE REORGANIZED DEBTORS OR THE CREDITORS' COMMITTEE TO THEIR RESPECTIVE CLIENTS PURSUANT TO DR6-102 OF THE CODE OF PROFESSIONAL RESPONSIBILITY; AND, PROVIDED, FURTHER, THAT NOTHING IN THIS SECTION 8.5.(A) SHALL RELEASE THE OBLIGATION OF ANY DIRECTORS AND OFFICERS OF THE DEBTORS UNDER ANY LOANS DUE AND OWING BY SUCH PARTY TO THE DEBTORS. (B) SUBJECT IN ALL RESPECTS TO SECTION 8.7. OF THIS PLAN, ON THE EFFECTIVE DATE, THE DEBTORS AND THE REORGANIZED DEBTORS ON BEHALF OF THEMSELVES AND AS REPRESENTATIVES OF THE ESTATES, RELEASE UNCONDITIONALLY, AND ARE HEREBY DEEMED TO RELEASE UNCONDITIONALLY, (I) EACH OF THE DEBTORS' FORMER AND PRESENT OFFICERS AND DIRECTORS, (II) ANY PERSON THAT ELECTED SUCH DIRECTORS TO THE EXTENT OF ALLEGED LIABILITY FOR ACTIONS OR INACTIONS OF SUCH DIRECTORS, (III) THE PRE-PETITION SECURED LENDERS, (IV) THE SENIOR NOTE TRUSTEE AND (V) THE ATTORNEYS, INVESTMENT BANKERS, RESTRUCTURING CONSULTANTS AND FINANCIAL ADVISORS OF THE FOREGOING, INCLUDING THE DEBTORS AND THE REORGANIZED DEBTORS (COLLECTIVELY, THE "PRE-PETITION RELEASEES") FROM ANY AND ALL CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, RIGHTS, CAUSES OF ACTION AND LIABILITIES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THOSE ARISING UNDER THE CODE), WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, BASED IN WHOLE OR IN PART ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE BEFORE THE PETITION DATE IN CONNECTION WITH OR RELATING TO PENN TRAFFIC OR ANY OF ITS DIRECT OR INDIRECT SUBSIDIARIES (THE "PRE-PETITION RELEASED MATTERS"); PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION 8.5.(B) SHALL (I) BE CONSTRUED TO RELEASE OR EXCULPATE ANY PERSON OR ENTITY FROM FRAUD, WILLFUL MISCONDUCT OR CRIMINAL CONDUCT OR (II) LIMIT THE LIABILITY OF THE PROFESSIONALS OF THE DEBTORS OR THE REORGANIZED DEBTORS TO THEIR RESPECTIVE CLIENTS PURSUANT TO DR6-102 OF THE CODE OF PROFESSIONAL RESPONSIBILITY; AND, PROVIDED, FURTHER, THAT NOTHING IN THIS SECTION 8.5.(B) SHALL RELEASE THE OBLIGATION OF ANY DIRECTORS AND OFFICERS OF THE DEBTORS UNDER ANY LOANS DUE AND OWING BY SUCH PARTY TO THE DEBTORS. (C) ON THE EFFECTIVE DATE, EACH HOLDER OF A CLAIM THAT IS ENTITLED TO VOTE ON THIS PLAN SHALL BE DEEMED TO HAVE UNCONDITIONALLY RELEASED THE PRE-PETITION RELEASEES FROM THE PRE-PETITION RELEASED MATTERS; PROVIDED, HOWEVER, THAT EACH HOLDER OF A CLAIM ENTITLED TO VOTE ON THIS PLAN MAY ELECT, BY CHECKING THE BOX PROVIDED ON THE BALLOT, NOT TO GRANT THE RELEASES SET FORTH IN THIS SECTION 8.5.(C). 37 (D) THE CONFIRMATION ORDER SHALL CONTAIN A PERMANENT INJUNCTION TO EFFECTUATE THE RELEASES GRANTED IN THIS SECTION 8.5. 8.6. RETENTION AND ENFORCEMENT, AND RELEASE, OF CAUSES OF ACTION. EXCEPT AS OTHERWISE SET FORTH IN THIS PLAN, PURSUANT TO SECTION 1123(B)(3)(B) OF THE CODE, ON THE EFFECTIVE DATE, ALL CAUSES OF ACTION, INCLUDING, WITHOUT LIMITATION, THE CAUSES OF ACTION IDENTIFIED ON PLAN SCHEDULE 8.6, TO BE FILED ON OR BEFORE THE EXHIBIT FILING DATE BUT EXCLUDING TRUST CLAIMS, SHALL BECOME THE PROPERTY OF THE REORGANIZED DEBTORS AND THE REORGANIZED DEBTORS SHALL RETAIN ALL CAUSES OF ACTION THAT THE DEBTORS HAD OR HAD POWER TO ASSERT ON BEHALF OF THEIR ESTATES IMMEDIATELY PRIOR TO THE EFFECTIVE DATE, WHETHER OR NOT SUCH CAUSES OF ACTION ARE LISTED ON PLAN SCHEDULE 8.6, AND MAY COMMENCE OR CONTINUE IN ANY APPROPRIATE COURT OR TRIBUNAL ANY SUIT OR OTHER PROCEEDING FOR THE ENFORCEMENT OF SUCH CAUSES OF ACTION; PROVIDED, HOWEVER, THAT ANY AND ALL OF THE DEBTORS' CLAIMS AND CAUSES OF ACTION ARISING UNDER SECTION 547 OF THE CODE THAT ARE NOT THE SUBJECT OF PENDING LITIGATION AS OF THE EFFECTIVE DATE (COLLECTIVELY, THE "PREFERENCE ACTIONS") SHALL BE WAIVED, ABANDONED, DISCHARGED AND RELEASED PURSUANT TO THIS PLAN. EXCEPT WITH RESPECT TO PREFERENCE ACTIONS AND EXCEPT AS OTHERWISE SET FORTH IN THIS PLAN, NOTHING CONTAINED IN THIS PLAN SHALL CONSTITUTE A RELEASE, SATISFACTION OR SETTLEMENT OF THE CAUSES OF ACTION OR ANY TRUST CLAIM, NOR CONSTITUTE A WAIVER OF THE RIGHTS, IF ANY, OF THE DEBTORS, THE REORGANIZED DEBTORS OR THE PENN TRAFFIC CREDITOR TRUST TO A JURY TRIAL WITH RESPECT TO ANY CAUSE OF ACTION OR ANY TRUST CLAIM, OR OBJECTION TO ANY CLAIM OR INTEREST, AND NOTHING IN THIS PLAN OR THE CONFIRMATION ORDER, INCLUDING THE ALLOWANCE OF ANY CLAIM OF A DEFENDANT IN ANY CAUSE OF ACTION OR ANY TRUST CLAIM, SHALL CONSTITUTE A WAIVER OR RELEASE OF ANY CAUSE OF ACTION OR TRUST CLAIM UNDER THE DOCTRINE OF RES JUDICATA NOR SHALL ANY CAUSE OF ACTION OR TRUST CLAIM BE BARRED OR LIMITED BY ANY ESTOPPEL, WHETHER JUDICIAL, EQUITABLE OR OTHERWISE. 8.7. EXCLUSIONS AND LIMITATIONS ON EXCULPATION, INDEMNIFICATION, AND RELEASES. NOTWITHSTANDING ANYTHING IN THIS PLAN TO THE CONTRARY, INCLUDING WITHOUT LIMITATION SECTION 8.5., NO PROVISION OF THIS PLAN OR THE CONFIRMATION ORDER, INCLUDING, WITHOUT LIMITATION, ANY EXCULPATION, INDEMNIFICATION OR RELEASE PROVISION, SHALL MODIFY, RELEASE, OR OTHERWISE LIMIT THE LIABILITY OF (I) ANY PERSON WITH RESPECT TO ANY TRUST CLAIM, OR (II) ANY PERSON NOT SPECIFICALLY RELEASED HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY PERSON THAT IS A CO-OBLIGOR OR JOINT TORTFEASOR OF A RELEASED PARTY OR THAT IS OTHERWISE LIABLE UNDER THEORIES OF VICARIOUS OR OTHER DERIVATIVE LIABILITY. THE REORGANIZED DEBTORS SHALL NOT PROVIDE INDEMNIFICATION ON ACCOUNT OF (I) AND (II) ABOVE. ARTICLE IX MISCELLANEOUS PROVISIONS 9.1. RETENTION OF JURISDICTION. Following the Effective Date, the Bankruptcy Court shall retain jurisdiction over all matters arising from or relating to the Cases to the fullest extent of applicable law, including, without limitation: (A) To determine the allowability, classification and priority of Claims and Interests upon objection, or to estimate, pursuant to Section 502(c) of the Code, the amount of any Claim that is or is anticipated to be contingent or unliquidated as of the Effective Date; 38 (B) To construe and to take any action authorized by the Code and requested by the Reorganized Debtors or any other party in interest to enforce this Plan and the documents and agreements filed in connection with this Plan, issue such orders as may be necessary for the implementation, execution and consummation of this Plan, including, without limiting the generality of the foregoing, orders to expedite regulatory decisions for the implementation of this Plan and to ensure conformity with the terms and conditions of this Plan, such documents and agreements and other orders of the Bankruptcy Court, notwithstanding any otherwise applicable non-bankruptcy law; (C) To determine any and all applications for allowance of compensation and expense reimbursement of professionals retained by the Debtors, the Reorganized Debtors or the Creditors' Committee, and for members of the Creditors' Committee, for periods on or before the Effective Date, and to determine any other request for payment of administrative expenses; (D) To determine all matters that may be pending before the Bankruptcy Court on or before the Effective Date; (E) To resolve any dispute regarding the implementation or interpretation of this Plan, or any related agreement or document that arises at any time before the Cases are closed, including determination, to the extent a dispute arises, of the entities entitled to a distribution within any particular Class of Claims and of the scope and nature of the Reorganized Debtors' obligations to cure defaults under assumed contracts, leases, franchises and permits; (F) To determine any and all matters relating to the rejection, assumption or assignment of executory contracts or unexpired leases entered into prior to the Petition Date, the nature and amount of any Cure required for the assumption of any executory contract or unexpired lease, and the allowance of any Claim resulting therefrom; (G) To determine all applications, adversary proceedings, contested matters and other litigated matters that were brought or that could have been brought in the Bankruptcy Court on or before the Effective Date; (H) To determine matters concerning local, state and federal taxes in accordance with Sections 346, 505 and 1146 of the Code, and to determine any tax claims that may arise against the Debtors or the Reorganized Debtors as a result of the transactions contemplated by this Plan; (I) To modify this Plan pursuant to Section 1127 of the Code or to remedy any apparent nonmaterial defect or omission in this Plan, or to reconcile any nonmaterial inconsistency in this Plan so as to carry out its intent and purposes; and (J) To hear and determine disputes arising in connection with the interpretation, implementation or enforcement of the Penn Traffic Creditor Trust and the Post-Effective Date Trade Lien Program, including any requests by the Trustee pursuant to Section 7.3.(D) of this Plan for additional Funding Contributions, and to issue, at the request of 39 the Trustee, orders pursuant to Bankruptcy Rule 2004 relating to Trust Claims to use in the administration of the Creditor Trust. Notwithstanding anything contained herein to the contrary, the Bankruptcy Court retains exclusive jurisdiction to adjudicate Trust Claims and to hear and determine any disputes related to Trust Claims and any motions to compromise or settle such Trust Claims; PROVIDED, HOWEVER, that the Trustee, on behalf of the Penn Traffic Creditor Trust, shall have authority to bring Trust Claims in any court of competent jurisdiction. From the Confirmation Date through the Effective Date, the Bankruptcy Court shall retain jurisdiction with respect to each of the foregoing items and all other matters that were subject to its jurisdiction prior to the Confirmation Date. 9.2. TERMS BINDING. Upon the entry of the Confirmation Order, all provisions of this Plan, including all agreements, instruments and other documents filed in connection with this Plan and executed by the Debtors or the Reorganized Debtors in connection with this Plan, shall be binding upon the Debtors, the Reorganized Debtors, all Claim and Interest holders and all other Persons that are affected in any manner by this Plan. Subject to the occurrence of the Effective Date, all agreements, instruments and other documents filed in connection with this Plan shall have full force and effect, and shall bind all parties thereto as of the entry of the Confirmation Order, whether or not such exhibits actually shall be executed by parties other than the Debtors or the Reorganized Debtors, or shall be issued, delivered or recorded on the Effective Date or thereafter. 9.3. SUCCESSORS AND ASSIGNS. The rights, benefits and obligations of any Person named or referred to in this Plan shall be binding upon, and shall inure to the benefit of, the heir, executor, administrator, successor or assignee of such Person. 9.4. CONFIRMATION ORDER AND PLAN CONTROL. Except as otherwise provided in this Plan, in the event of any inconsistency between this Plan and the First Amended Disclosure Statement, any exhibit to this Plan or any other instrument or document created or executed pursuant to this Plan, this Plan shall control. In the event of any inconsistency between the Plan and the Confirmation Order, the Confirmation Order shall control. 9.5. GOVERNING LAW. Except to the extent that the Code or any other federal law is applicable or to the extent the law of a different jurisdiction is validly elected by the Debtors, the rights, duties and obligations arising under this Plan shall be governed in accordance with the substantive laws of the United States of America and, to the extent federal law is not applicable, the laws of the State of New York. 9.6. SEVERABILITY. If the Bankruptcy Court determines at the Confirmation Hearing that any material provision of this Plan is invalid or unenforceable, such provision, subject to Section 1127 of the Code, shall be severable from this Plan and shall be null and void, and, in such event, such determination shall in no way limit or affect the enforceability or operative effect of any or all other portions of this Plan. 40 9.7. INCORPORATION BY REFERENCE. Each Exhibit or Schedule to this Plan is incorporated herein by reference. 9.8. MODIFICATIONS TO THIS PLAN. Upon the mutual consent of the Debtors and the Creditors' Committee, this Plan, and any Exhibit or Schedule to this Plan, may be amended or modified at any time prior to the Confirmation Date in accordance with the Code and Bankruptcy Rules. 9.9. REVOCATION, WITHDRAWAL OR NON-CONSUMMATION. The Debtors reserve the right to revoke or withdraw this Plan at any time prior to the Effective Date. If the Debtors revoke or withdraw this Plan prior to the Effective Date, or if the Confirmation Date or the Effective Date does not occur, then this Plan, any settlement or compromise embodied in this Plan (including the fixing or limiting to an amount certain any Claim or Class of Claims), the assumption or rejection of executory contracts or leases effected by this Plan, and any document or agreement executed pursuant to this Plan, shall be null and void; PROVIDED, HOWEVER, that all orders of the Bankruptcy Court and all documents executed pursuant thereto, except the Confirmation Order, shall remain in full force and effect. In such event, nothing contained herein, and no acts taken in preparation for consummation of this Plan, shall be deemed to constitute a waiver or release of any Claims by or against any of the Debtors or any other Person, to prejudice in any manner the rights of any of the Debtors or any Person in any further proceedings or to constitute an admission of any sort by any of the Debtors or any other Person. 9.10. NOTICE. Any notice required or permitted to be provided under this Plan shall be in writing and served by (a) certified mail, return receipt requested, (b) hand delivery or (c) overnight delivery service, to be addressed as follows: If to the Debtors: The Penn Traffic Company 1200 State Fair Boulevard Syracuse, New York 13221-4737 ATTENTION: Francis D. Price, Esq. With a copy to: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019-6064 ATTENTION: Kelley A. Cornish, Esq. 41 If to the Creditors' Committee/Post-Effective Date Committee: Otterbourg, Steindler, Houston & Rosen, P.C. 230 Park Avenue New York, New York 10169-0075 ATTENTION: Scott L. Hazan, Esq. Glenn B. Rice, Esq. Enid Nagler Stuart, Esq. If to the DIP Lenders: Kaye Scholer LLP 425 Park Avenue New York, New York 10022-3598 ATTENTION: Alfred J. Bianco, Esq. Marc D. Rosenberg, Esq. Dated: February 4, 2005 Respectfully submitted, THE PENN TRAFFIC COMPANY DAIRY DELL, INC. PENNY CURTISS BAKING COMPANY, INC. BIG M SUPERMARKETS, INC. SUNRISE PROPERTIES, INC., PENNWAY EXPRESS, INC. BIG BEAR DISTRIBUTION COMPANY BRADFORD SUPERMARKETS, INC. P&C FOOD MARKETS, INC. OF VERMONT ABBOTT REALTY CORPORATION COMMANDER FOODS, INC. P.T. DEVELOPMENT LLC PT FAYETTEVILLE/UTICA LLC Debtors and Debtors-in-Possession By: /s/ Robert J. Chapman ------------------------------------------------- Robert J. Chapman President and Chief Executive Officer of The Penn Traffic Company and Authorized Signatory 42 PLAN EXHIBIT 1 -------------- SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION of THE PENN TRAFFIC COMPANY The Penn Traffic Company, a corporation incorporated under the laws of the State of Delaware (the "Corporation"), hereby certifies as follows: A. The name of the Corporation is The Penn Traffic Company. The Corporation's original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 22, 1992. B. This Second Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the "DGCL") by virtue of Section 303 of the DGCL, and further amends and restates the provisions of the Corporation's Certificate of Incorporation. C. Provision for the making of this Second Amended and Restated Certificate of Incorporation of the Corporation is contained in the Joint Plan of Reorganization of The Penn Traffic Company and its affiliated debtors and debtors-in-possession (the "Plan") under chapter 11 of the United States Bankruptcy Code (Jointly Administered Case No. 03-22945(ASH)), which Plan was confirmed by order of the United States Bankruptcy Court for the Southern District of New York on ___________, 2005. D. The text of the Certificate of Incorporation is amended and restated in its entirety to read as follows: 1. NAME. The name of the corporation is The Penn Traffic Company. 2. ADDRESS; REGISTERED OFFICE AND AGENT. The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, City of Wilmington 19801; and its registered agent at such address is The Corporation Trust Company. 3. PURPOSE. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. 4. NUMBER OF SHARES. The total number of shares of stock that the Corporation shall have authority to issue is Sixteen Million (16,000,000) consisting of (i) One Million (1,000,000) shares of preferred stock, $.01 par value per share (the "Preferred Stock"), and (ii) Fifteen Million (15,000,000) shares of common stock, $.01 par value per share (the "Common Stock"). To the extent required by Section 1123(a)(6) of the U.S. Bankruptcy Code (11 U.S.C. ss. 1123(a)(6)), no nonvoting equity securities of the Corporation shall be issued. This provision shall have no further force and effect beyond that required by Section 1123(a)(6) and is applicable only for so long as such Section is in effect and applicable to the Corporation. 5. PREFERRED STOCK. The Board of Directors of the Corporation (the "Board") is expressly authorized, by resolution or resolutions, to provide for the issue of all or any shares of the Preferred Stock, in one or more series, and to fix for each such 2 series such voting powers, full or limited or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereon, as shall be stated and expressed in the resolution or resolutions adopted by the Board providing for the issue of such series (a "Preferred Stock Designation") and as may be permitted by the DGCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of a majority of the holders of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock") voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation. 6. COMMON STOCK. Except as otherwise provided by law or as otherwise provided in any Preferred Stock Designation, the holders of the Common Stock shall exclusively possess all voting power and each share of Common Stock shall have one vote. 7. SECTION 203. Pursuant to Section 203(b)(l) of the DGCL, the Corporation hereby expressly opts not to be governed by Section 203 of the DGCL. 8. ELECTION OF DIRECTORS. Members of the Board may be elected either by written ballot or by voice vote. 3 9. LIMITATION OF LIABILITY. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that this provision shall not eliminate or limit the liability of a director (a) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under section 174 of the DGCL or (d) for any transaction from which the director derived any improper personal benefits. Any repeal or modification of the foregoing provision shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. 10. INDEMNIFICATION. 10.1. To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a director or officer of the Corporation, or is or was serving as a director, officer, manager, member, employee or agent or in any other capacity at the request of the Corporation, for any other corporation, company, partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity") while serving as a director or officer of the Corporation, against judgments, fines, penalties, excise taxes, amounts paid in settlement 4 and costs, charges and expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with such Proceeding, if such person acted in good faith and in a manner such person believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. To the extent specified by the Board at any time and to the extent not prohibited by law, the Corporation may indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed Proceeding, whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving as a director, officer, manager, member, employee or agent or in any other capacity at the request of the Corporation, for any Other Entity, against judgment, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with such Proceeding, if such person acted in good faith and in a manner such person believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. 10.2. The Corporation shall, from time to time, reimburse or advance to any director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and 5 disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the DGCL, such expenses incurred by or on behalf of any director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such director, officer or other person is not entitled to be indemnified for such expenses. 10.3. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 10 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, this Second Amended Certificate of Incorporation, the By-laws of the Corporation (the "By-laws"), any agreement (including any policy of insurance purchased or provided by the Corporation under which directors, officers, employees and other agents of the Corporation are covered), any vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. 10.4. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 10 shall continue as to a person who has ceased to be a director or officer (or other person 6 indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person. 10.5. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, member, manager, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Section 10, the By-laws or under section 145 of the DGCL or any other provision of law. 10.6. The provisions of this Section 10 shall be a contract between the Corporation, on the one hand, and each director and officer who serves in such capacity at any time while this Section 10 is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the Corporation and each such director, officer, or other person intend to be, and shall be, legally bound. No repeal or modification of this Section 10 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. 10.7. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 10 shall be 7 enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding. 10.8. Any director or officer of the Corporation serving in any capacity of (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation. 10.9. Any person entitled to be indemnified or to reimbursement or advancement of expenses as a matter of right pursuant to this Section 10 may elect to have the right to indemnification or reimbursement or advancement of expenses 8 interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought. 11. ADOPTION, AMENDMENT AND/OR REPEAL OF BY-LAWS. The Board may from time to time adopt, amend or repeal the By-laws of the Corporation; PROVIDED, HOWEVER, that any By-laws adopted or amended by the Board may be amended or repealed, and any By-laws may be adopted, by the stockholders of the Corporation by vote of a majority of the holders of shares of stock of the Corporation entitled to vote in the election of directors of the Corporation. 12. STOCKHOLDER MEETINGS. Any action required or permitted to be taken by the stockholders of the Corporation may be effected at a duly called annual or special meeting of such holders and may also be effected by any consent in writing of such holders in lieu of a meeting. At any annual meeting or special meeting of stockholders of the Corporation, only such business shall be conducted as shall have been brought before such meeting in the manner provided by the By-laws of the Corporation. IN WITNESS WHEREOF, The Penn Traffic Company has caused this Second Amended and Restated Certificate of Incorporation to be signed by its duly authorized officer on ______ __, 2005. _____________________________ Name: Title: 10 PLAN EXHIBIT 2 -------------- SECOND AMENDED AND RESTATED BY-LAWS of THE PENN TRAFFIC COMPANY (A Delaware Corporation) ________________________ ARTICLE I DEFINITIONS As used in these By-laws, unless the context otherwise requires, the term: 1.1. "Assistant Secretary" means an Assistant Secretary of the Corporation. 1.2. "Assistant Treasurer" means an Assistant Treasurer of the Corporation. 1.3. "Board" means the Board of Directors of the Corporation. 1.4. "By-laws" means these Second Amended and Restated By-laws of the Corporation, as further amended from time to time. 1.5. "CEO" means the President and Chief Executive Officer of the Corporation. 1.6. "Certificate of Incorporation" means the Second Amended and Restated Certificate of Incorporation of the Corporation, as amended, supplemented or restated from time to time. 1.7. "Chairman" means the Chairman of the Board of Directors of the Corporation. 2 1.8. "Chief Financial Officer" means the Chief Financial Officer of the Corporation 1.9. "Corporation" means The Penn Traffic Company. 1.10. "Directors" means directors of the Corporation. 1.11. "Entire Board" means all directors of the Corporation in office, whether or not present at a meeting of the Board, but disregarding vacancies. 1.12. "General Corporation Law" means the General Corporation Law of the State of Delaware, as amended from time to time. 1.13. "Office of the Corporation" means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding. 1.14. "Secretary" means the Secretary of the Corporation. 1.15. "Stockholders" means stockholders of the Corporation. 1.16. "Treasurer" means the Treasurer of the Corporation. 1.17. "Vice Chairman of the Board" means the Vice Chairman of the Board of Directors of the Corporation. 1.18. "Vice President" means a Vice President of the Corporation. ARTICLE II STOCKHOLDERS 2.1. PLACE OF MEETINGS. Every meeting of Stockholders shall be held at the office of the Corporation or at such other place within or without the State of 3 Delaware as shall be specified or fixed in the notice of such meeting or in the waiver of notice thereof. 2.2. ANNUAL MEETING. A meeting of Stockholders shall be held annually for the election of Directors and the transaction of other business at such hour and on such business day in each year as may be determined by the Board and designated in the notice of meeting. 2.3. DEFERRED MEETING FOR ELECTION OF DIRECTORS, ETC. If the annual meeting of Stockholders for the election of Directors and the transaction of other business is not held on the date designated therefor at any adjournment of a meeting convened on such date, the Board shall call a meeting of Stockholders for the election of Directors and the transaction of other business as soon thereafter as convenient. 2.4. SPECIAL MEETINGS. A special meeting of Stockholders may be called at any time only by the Board, the Chairman or the CEO, and shall be called by the CEO or Secretary at the request, in writing, of Stockholders owning a majority of the shares of capital stock of the Corporation issued and outstanding and entitled to vote. Any such request shall state the purpose of the proposed meeting. At any special meeting of Stockholders only such business may be transacted as is related to the purpose or purposes of such meeting set forth in the notice thereof given pursuant to Section 2.6 hereof or in any waiver of notice thereof given pursuant to Section 2.7 hereof. 2.5. FIXING RECORD DATE. For the purpose of (a) determining the Stockholders entitled (i) to notice of or to vote at any meeting of Stockholders or any adjournment thereof, (ii) unless otherwise provided in the Certificate of Incorporation to express consent to corporate action in writing without a meeting or (iii) to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock; or (b) any 4 other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date was adopted by the Board and which record date shall not be (x) in the case of clause (a)(i) above, more than sixty (60) nor less than ten (10) days before the date of such meeting, (y) in the case of clause (a)(ii) above, more than ten (10) days after the date upon which the resolution fixing the record date was adopted by the Board and (z) in the case of clause (a)(iii) or (b) above, more than sixty (60) days prior to such action. If no such record date is fixed: 2.5.1. the record date for determining Stockholders entitled to notice of or to vote at a meeting of Stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; 2.5.2. the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting (unless otherwise provided in the Certificate of Incorporation), when no prior action by the Board is required under the General Corporation Law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of Stockholders are recorded; and when prior action by the Board is required under the General Corporation Law, the record date for determining Stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board adopts the resolution taking such prior action; and 5 2.5.3. the record date for determining Stockholders for any purpose other than those specified in Sections 2.5.1 and 2.5.2 shall be at the close of business on the day on which the Board adopts the resolution relating thereto. When a determination of Stockholders entitled to notice of or to vote at any meeting of Stockholders has been made as provided in this Section 2.5, such determination shall apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting. Delivery made to the Corporation's registered office in accordance with Section 2.5.2 shall be by hand or by certified or registered mail, return receipt requested. 2.6. NOTICE OF MEETINGS OF STOCKHOLDERS. Except as otherwise provided in Sections 2.5 and 2.7 hereof, whenever under the provisions of any statute, the Certificate of Incorporation or these By-laws, Stockholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by any statute, the Certificate of Incorporation or these By-laws, a copy of the notice of any meeting shall be given, personally or by mail, not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each Stockholder entitled to notice of or to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage prepaid, directed to the Stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice required by this Section 2.6 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at 6 which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If, however, the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting. 2.7. WAIVERS OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the Stockholder or Stockholders entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Stockholder at a meeting shall constitute a waiver of notice of such meeting except when the Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Stockholders need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws. 2.8. LIST OF STOCKHOLDERS. The Secretary shall prepare and make, or cause to be prepared and made, at least ten (10) days before every meeting of Stockholders, a complete list of the Stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. Such list shall be open to the examination of any Stockholder, the Stockholder's agent, or attorney, at the Stockholder's expense, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall 7 also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Stockholder who is present. The Corporation shall maintain the Stockholder list in written form or in another form capable of conversion into written form within a reasonable time. The stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the stock ledger, the list of Stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of Stockholders. 2.9. QUORUM OF STOCKHOLDERS; ADJOURNMENT. Except as otherwise provided by any statute, the Certificate of Incorporation or these By-laws, the holders of a majority of all outstanding shares of stock entitled to vote at any meeting of Stockholders, present in person or represented by proxy, shall constitute a quorum for the transaction of any business at such meeting. When a quorum is once present to organize a meeting of Stockholders, it is not broken by the subsequent withdrawal of any Stockholders. The holders of a majority of the shares of stock present in person or represented by proxy at any meeting of Stockholders, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; PROVIDED, HOWEVER, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. 2.10. VOTING; PROXIES. Unless otherwise provided in the Certificate of Incorporation, every Stockholder of record shall be entitled at every meeting of Stockholders to one vote for each share of capital stock standing in his or her name on the record of Stockholders determined in accordance with Section 2.5 hereof. If the 8 Certificate of Incorporation provides for more or less than one vote for any share on any matter, each reference in the By-laws or the General Corporation Law to a majority or other proportion of stock shall refer to such majority or other proportion of the votes of such stock. The provisions of Sections 212 and 217 of the General Corporation Law shall apply in determining whether any shares of capital stock may be voted and the persons, if any, entitled to vote such shares; but the Corporation shall be protected in assuming that the persons in whose names shares of capital stock stand on the stock ledger of the Corporation are entitled to vote such shares. Holders of redeemable shares of stock are not entitled to vote after the notice of redemption is mailed to such holders and a sum sufficient to redeem the stocks has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares of stock. At any meeting of Stockholders (at which a quorum was present to organize the meeting), all matters which may be properly considered at such meeting, except as otherwise provided by statute or by the Certificate of Incorporation or by these By-laws, shall be decided by a majority of the votes cast at such meeting by the holders of shares present in person or represented by proxy and entitled to vote thereon, whether or not a quorum is present when the vote is taken. All elections of Directors shall be by written ballot unless otherwise provided in the Certificate of Incorporation. In voting on any other question on which a vote by ballot is required by law or is demanded by any Stockholder entitled to vote, the voting shall be by ballot. Each ballot shall be signed by the Stockholder voting or the Stockholder's proxy and shall state the number of shares voted. On all other questions, the voting may be by voice vote. Each Stockholder entitled to vote at a meeting of Stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such Stockholder by proxy. The validity and enforceability of any proxy shall be determined in accordance with Section 212 of the General Corporation Law. A Stockholder may revoke any proxy that is not irrevocable 9 by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary. 2.11. VOTING PROCEDURES AND INSPECTORS OF ELECTION AT MEETINGS OF STOCKHOLDERS. The Board, in advance of any meeting of Stockholders, may appoint one or more inspectors to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed or is able to act at a meeting, the person presiding at the meeting may appoint, and on the request of any Stockholder entitled to vote thereat shall appoint, one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. The date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a Stockholder shall determine otherwise. 10 2.12. CONDUCT OF MEETINGS; PROCEDURES. (a) At each meeting of Stockholders, the Chairman, or in the absence of the Chairman, the CEO, or in the absence of the CEO, a Vice President, and in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on time served in such office, present), shall act as chairman of the meeting. The Secretary, or in his or her absence one of the Assistant Secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting, respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, shall be chosen by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting. (b) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations of persons for election to the Board may be made at an annual meeting or special meeting of Stockholders (i) by or at the direction of the Board, (ii) by any nominating committee or person appointed by the Board or (iii) by any Stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the provisions of the following paragraph (persons nominated in accordance with (iii) above are referred to herein as "stockholder nominees"). In addition to any other applicable requirements, all nominations of Stockholder nominees must be made by written notice given by or on behalf of a Stockholder of record of the Corporation (the "Notice of Nomination"). The Notice of Nomination must be delivered personally to, or mailed to, and received at the principal executive office of the Corporation, addressed to the attention of the Secretary, no less than thirty (30) days nor more than sixty (60) days prior to the annual meeting or special 11 meeting of Stockholders, or in the event that less than forty (40) days' notice of the date of the annual meeting is given to Stockholders, no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting or special meeting was mailed. Such Notice of Nomination shall set forth (i) the name and record address of the Stockholder proposing to make nominations, (ii) the class and number of shares of capital stock held of record, held beneficially and represented by proxy held by such person as of the record date for the meeting and as of the date of such Notice of Nomination, (iii) all information regarding each stockholder nominee that would be required to be set forth in a definitive proxy statement filed with the Securities and Exchange Commission pursuant to Section 14 of the Exchange Act, or any successor thereto, and the written consent of each such stockholder nominee to serve if elected, and (iv) all other information that would be required to be filed with the Securities and Exchange Commission if the person proposing such nominations were a participant in a solicitation subject to Section 14 of the Exchange Act or any successor thereto. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting, that any proposed nomination of a stockholder nominee was not made in accordance with the foregoing procedures and, if he or she should so determine, he or she shall declare the same to the meeting and the defective nomination shall be discarded. (c) At any annual meeting of Stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting of Stockholders, (i) business must be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the meeting by or at the direction of the Board or (iii) otherwise properly brought before the meeting by a Stockholder in 12 accordance with the terms of the following paragraph (business brought before the meeting in accordance with (iii) above is referred to as "stockholder business"). In addition to any other applicable requirements, all proposals of stockholder business must be made by written notice given by or on behalf of a Stockholder of record of the Corporation (the "Notice of Business"). The Notice of Business must be delivered personally to, or mailed to, and received at the principal executive office of the Corporation, addressed to the attention of the Secretary, no later than the close of business on the tenth day following the day on which notice of the date of the annual meeting of Stockholders; PROVIDED, HOWEVER, that such Notice of Business shall not be required to be given more than sixty (60) days prior to an annual meeting of Stockholders. Such Notice of Business shall set forth (i) the name and record address of the Stockholder proposing such stockholder business, (ii) the class and number of shares of capital stock held of record, held beneficially and represented by proxy held by such person as of the record date for the meeting and as of the date of such Notice of Business, (iii) a brief description of the stockholder business desired to be brought before the annual meeting and the reasons for conducting such stockholder business at the annual meeting, (iv) any material interest of the Stockholder in such stockholder business and (v) all other information that would be required to be filed with the Securities and Exchange Commission if the person proposing such stockholder business were a participant in a solicitation subject to Section 14 of the Exchange Act. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at the annual meeting of Stockholders except in accordance with the procedures set forth in this Section 2.12(c), PROVIDED, HOWEVER, that nothing in this Section 2.12(c) shall be deemed to preclude 13 discussion by any Stockholder of any business properly brought before the annual meeting in accordance with said procedure. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting, that business was not properly brought before the meeting in accordance with the foregoing procedures and, if he or she should so determine, he or she shall declare the same to the meeting and any such business not properly brought before the meeting shall not be transacted. 2.13. ORDER OF BUSINESS. The order of business at all meetings of Stockholders shall be as determined by the chairman of the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting. 2.14. ACTION BY STOCKHOLDERS. Any action required or permitted by the General Corporation Law to be taken at an annual or special meeting of Stockholders of the Corporation may be taken without a meeting if Stockholders holding a majority of the voting shares consent thereto in writing, and the writing or writings are filed with the minutes of meetings of Stockholders. ARTICLE III DIRECTORS 3.1. GENERAL POWERS. Except as otherwise provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and regulations, not inconsistent with the Certificate of Incorporation or these By-laws or applicable laws, as it may deem proper for the conduct of its meetings and the management of the Corporation. In addition to the powers expressly conferred by these By-laws, the Board 14 may exercise all powers and perform all acts that are not required by these By-laws or the Certificate of Incorporation or by statute to be exercised and performed by the Stockholders. 3.2. NUMBER; QUALIFICATION; TERM OF OFFICE. The Board shall consist of one or more members. The number of Directors shall be fixed initially at seven (7) and may thereafter be changed from time to time by action of the Stockholders or by action of the Board. Directors need not be Stockholders. Each Director shall hold office until a successor is elected and qualified or until the Director's death, resignation or removal. 3.3. ELECTION. Directors shall, except as otherwise required by statute or by the Certificate of Incorporation, be elected by a plurality of the votes cast at a meeting of Stockholders by the holders of shares present in person or represented by proxy at the meeting and entitled to vote in the election. 3.4. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Unless otherwise provided in the Certificate of Incorporation, newly created Directorships resulting from an increase in the number of Directors and vacancies occurring in the Board for any other reason, including the removal of Directors without cause, may be filled by the affirmative votes of a majority of the entire Board, although less than a quorum, or by a sole remaining Director, or may be elected by a plurality of the votes cast by the holders of shares of capital stock entitled to vote in the election at a special meeting of Stockholders called for that purpose. A Director elected to fill a vacancy shall be elected to hold office until a successor is elected and qualified, or until the Director's earlier death, resignation or removal. 3.5. RESIGNATION. Any Director may resign at any time by written notice to the Corporation. Such resignation shall take effect at the time therein specified, 15 and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective. 3.6. REMOVAL. Subject to the provisions of Section 141(k) of the General Corporation Law, any or all of the Directors may be removed with or without cause by vote of the holders of a majority of the shares then entitled to vote at an election of Directors. 3.7. COMPENSATION. Each Director, in consideration of his or her service as such, shall be entitled to receive from the Corporation such amount per annum or such fees for attendance at Directors' meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in connection with the performance of his or her duties. Each Director who shall serve as a member of any committee of Directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in the performance of his or her duties. Nothing contained in this Section 3.7 shall preclude any Director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor. 3.8. TIMES AND PLACES OF MEETINGS. The Board may hold meetings, both regular and special, either within or without the State of Delaware. The times and places for holding meetings of the Board may be fixed from time to time by resolution of the Board or (unless contrary to a resolution of the Board) in the notice of the meeting. 3.9. ANNUAL MEETINGS. On the day when and at the place where the annual meeting of Stockholders for the election of Directors is held, and as soon as practicable thereafter, the Board may hold its annual meeting, without notice of such 16 meeting, for the purposes of organization, the election of officers and the transaction of other business. The annual meeting of the Board may be held at any other time and place specified in a notice given as provided in Section 3.11 hereof for special meetings of the Board or in a waiver of notice thereof. 3.10. REGULAR MEETINGS. Regular meetings of the Board may be held without notice at such times and at such places as shall from time to time be determined by the Board. 3.11. SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman, the CEO or the Secretary or by any two or more Directors then serving on at least one day's notice to each Director given by one of the means specified in Section 3.14 hereof other than by mail, or on at least three (3) days' notice if given by mail. Special meetings shall be called by the Chairman, CEO or Secretary in like manner and on like notice on the written request of any two or more of the Directors then serving. 3.12. TELEPHONE MEETINGS. Directors or members of any committee designated by the Board may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.12 shall constitute presence in person at such meeting. 3.13. ADJOURNED MEETINGS. A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. At least one (1) day's notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.14 hereof other than by mail, or at least three (3) days' 17 notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called. 3.14. NOTICE PROCEDURE. Subject to Sections 3.11 and 3.17 hereof, whenever, under the provisions of any statute, the Certificate of Incorporation or these By-laws, notice is required to be given to any Director, such notice shall be deemed given effectively if given in person or by telephone, by mail addressed to such Director at such Director's address as it appears on the records of the Corporation, with postage thereon prepaid, or by telegram, telex, telecopy or similar means addressed as aforesaid. 3.15. WAIVER OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the person or persons entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a person at a meeting shall constitute a waiver of notice of such meeting except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors or a committee of Directors need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws. 3.16. ORGANIZATION. At each meeting of the Board, the Chairman, or in the absence of the Chairman, the CEO, or in the absence of the CEO, a chairman chosen by a majority of the Directors present, shall preside. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, 18 the person presiding at the meeting may appoint any person to act as secretary of the meeting. 3.17. QUORUM OF DIRECTORS. The presence in person of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board, but a majority of a smaller number may adjourn any such meeting to a later date. 3.18. ACTION BY MAJORITY VOTE. Except as otherwise expressly required by statute, the Certificate of Incorporation or these By-laws, the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board. 3.19. ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. ARTICLE IV COMMITTEES OF THE BOARD 4.1. COMMITTEES. The Board may, by resolution passed by a vote of a majority of the entire Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such 19 member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board passed as aforesaid, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be impressed on all papers that may require it, but no such committee shall have the power or authority of the Board in reference to (i) amending the Certificate of Incorporation, (ii) adopting an agreement of merger or consolidation under section 251 or section 252 of the General Corporation Law, (iii) recommending to the Stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, or a dissolution of the Corporation or a revocation of a dissolution, or (iv) amending the By-laws of the Corporation; and, unless the resolution designating it expressly so provides, no such committee shall have the power and authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law. Unless otherwise specified in the resolution of the Board designating a committee, at all meetings of such committee a majority of the total number of members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3 of these By-laws. 4.2. COMMITTEE MINUTES. The committees shall keep regular minutes of their proceedings and report the same to the Board. 20 ARTICLE V OFFICERS 5.1. POSITIONS. The officers of the Corporation shall be a CEO, a Secretary, a Treasurer or a Chief Financial Officer and such other officers as the Board may appoint, including a Chairman, Vice Chairman of the Board, one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers, who shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The Board may designate one or more Vice Presidents as Executive Vice Presidents and may use descriptive words or phrases to designate the standing, seniority or areas of special competence of the Vice Presidents elected or appointed by it. Any number of offices may be held by the same person unless the Certificate of Incorporation or these By-laws otherwise provide. 5.2. APPOINTMENT. The officers of the Corporation shall be chosen by the Board at its annual meeting or at such other time or times as the Board shall determine. 5.3. COMPENSATION. The compensation of all officers of the Corporation shall be fixed by the Board. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that the officer is also a Director. 5.4. TERM OF OFFICE. Each officer of the Corporation shall hold office for the term for which he or she is elected and until such officer's successor is chosen and qualifies or until such officer's earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract 21 rights of the Corporation, if any. Any officer elected or appointed by the Board may be removed at any time, with or without cause, by vote of a majority of the entire Board. Any vacancy occurring in any office of the Corporation shall be filled by the Board. The removal of an officer without cause shall be without prejudice to the officer's contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. 5.5. FIDELITY BONDS. The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise. 5.6. CHAIRMAN. The Chairman, if one shall have been appointed, shall preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board. 5.7. VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board, if one shall have been appointed, shall, in the absence of the Chairman of the Board, preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board. 5.8. CEO. The CEO shall be the President and Chief Executive Officer of the Corporation and shall have general supervision over the business of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of Directors. The CEO shall preside at all meetings of the Stockholders and at all meetings of the Board at which the Chairman (if there be one) is not present. The CEO may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation or shall be required by statute otherwise to be signed or executed and, in general, the CEO shall perform all duties incident to the office of 22 chief executive officer and chief operating officer of a corporation and such other duties as may from time to time be assigned to the CEO by the Board. 5.9. VICE PRESIDENTS. At the request of the CEO, or in the absence of the CEO, at the request of the Board, the Vice Presidents shall (in such order as may be designated by the Board, or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of the CEO and, in so performing, shall have all the powers of, and be subject to all restrictions upon, the CEO. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and each Vice President shall perform such other duties as from time to time may be assigned to such Vice President by the Board or by the CEO. 5.10. SECRETARY. The Secretary shall attend all meetings of the Board and of the Stockholders and shall record all the proceedings of the meetings of the Board and of the Stockholders in a book to be kept for that purpose, and shall perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the Stockholders and shall perform such other duties as may be prescribed by the Board or by the CEO, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have authority to impress the same on any instrument requiring it, and when so impressed the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to impress the seal of the Corporation and to attest the same by such officer's signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the CEO or any Vice 23 President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, shall see that the reports, statements and other documents required by statute are properly kept and filed and, in general, shall perform all duties incident to the office of Secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board or by the CEO. 5.11. TREASURER OR CHIEF FINANCIAL OFFICER. The Treasurer or Chief Financial Officer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositories of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed; regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation; have the right to require from time to time reports or statements giving such information as the Treasurer or Chief Financial Officer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the CEO or the Board, whenever the CEO or the Board shall require the Treasurer or Chief Financial Officer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation; exhibit at all reasonable times the records and books of account to any of the Directors upon application at the office of the Corporation where such records and books are kept; disburse the funds of the Corporation as ordered by the Board; and, in general, perform all duties incident to the office of Treasurer or Chief 24 Financial Officer of a corporation and such other duties as may from time to time be assigned to the Treasurer or Chief Financial Officer by the Board or the CEO. 5.12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Board or by the CEO. ARTICLE VI CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. 6.1. EXECUTION OF CONTRACTS. The Board, except as otherwise provided in these By-laws, may prospectively or retroactively authorize any officer or officers, employee or employees or agent or agents, in the name and on behalf of the Corporation, to enter into any contract or execute and deliver any instrument, and any such authority may be general or confined to specific instances, or otherwise limited. 6.2. LOANS. The Board may prospectively or retroactively authorize the CEO or any other officer, employee or agent of the Corporation to effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances the person so authorized may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation, and, when authorized by the Board so to do, may pledge and hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority conferred by the Board may be general or confined to specific instances, or otherwise limited. 6.3. CHECKS, DRAFTS, ETC. All checks, drafts and other orders for the payment of money out of the funds of the Corporation and all evidences of indebtedness 25 of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board. 6.4. DEPOSITS. The funds of the Corporation not otherwise employed shall be deposited from time to time to the order of the Corporation with such banks, trust companies, investment banking firms, financial institutions or other depositaries as the Board may select or as may be selected by an officer, employee or agent of the Corporation to whom such power to select may from time to time be delegated by the Board. ARTICLE VII STOCK AND DIVIDENDS 7.1. CERTIFICATES REPRESENTING SHARES. The shares of capital stock of the Corporation shall be represented by certificates in such form (consistent with the provisions of Section 158 of the General Corporation Law) as shall be approved by the Board. Such certificates shall be signed by the Chairman, the CEO or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and may be impressed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registrar other than the Corporation itself or its employee. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may, unless otherwise ordered by the Board, be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. 7.2. TRANSFER OF SHARES. Transfers of shares of capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof or 26 by the holder's duly authorized attorney appointed by a power of attorney duly executed and filed with the Secretary or a transfer agent of the Corporation, and on surrender of the certificate or certificates representing such shares of capital stock properly endorsed for transfer and upon payment of all necessary transfer taxes. Every certificate exchanged, returned or surrendered to the Corporation shall be marked "canceled," with the date of cancellation, by the Secretary or an Assistant Secretary or the transfer agent of the Corporation. A person in whose name shares of capital stock shall stand on the books of the Corporation shall be deemed the owner thereof to receive dividends, to vote as such owner and for all other purposes as respects the Corporation. No transfer of shares of capital stock shall be valid as against the Corporation, its Stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until such transfer shall have been entered on the books of the Corporation by an entry showing from and to whom transferred. 7.3. TRANSFER AND REGISTRY AGENTS. The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board. 7.4. LOST, DESTROYED, STOLEN AND MUTILATED CERTIFICATES. The holder of any shares of capital stock of the Corporation shall immediately notify the Corporation of any loss, destruction, theft or mutilation of the certificate representing such shares, and the Corporation may issue a new certificate to replace the certificate alleged to have been lost, destroyed, stolen or mutilated. The Board may, in its discretion, as a condition to the issue of any such new certificate, require the owner of the lost, destroyed, stolen or mutilated certificate, or his or her legal representatives, to make proof satisfactory to the Board of such loss, destruction, theft or mutilation and to advertise such fact in such manner as the Board may require, and to give the Corporation and its transfer agents and registrars, or such of them as the Board may require, a bond in such form, in such sums 27 and with such surety or sureties as the Board may direct, to indemnify the Corporation and its transfer agents and registrars against any claim that may be made against any of them on account of the continued existence of any such certificate so alleged to have been lost, destroyed, stolen or mutilated and against any expense in connection with such claim. 7.5. RULES AND REGULATIONS. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws or with the Certificate of Incorporation, concerning the issue, transfer and registration of certificates representing shares of its capital stock. 7.6. RESTRICTION ON TRANSFER OF STOCK. A written restriction on the transfer or registration of transfer of capital stock of the Corporation, if permitted by Section 202 of the General Corporation Law and noted conspicuously on the certificate representing such capital stock, may be enforced against the holder of the restricted capital stock or any successor or transferee of the holder, including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the certificate representing such capital stock, a restriction, even though permitted by Section 202 of the General Corporation Law, shall be ineffective except against a person with actual knowledge of the restriction. A restriction on the transfer or registration of transfer of capital stock of the Corporation may be imposed either by the Certificate of Incorporation or by an agreement among any number of Stockholders or among such Stockholders and the Corporation. No restriction so imposed shall be binding with respect to capital stock issued prior to the adoption of the restriction unless the holders of such capital stock are parties to an agreement or voted in favor of the restriction. 28 7.7. DIVIDENDS, SURPLUS, ETC. Subject to the provisions of the Certificate of Incorporation and of law, the Board: 7.7.1. may declare and pay dividends or make other distributions on the outstanding shares of capital stock in such amounts and at such time or times as it, in its discretion, shall deem advisable giving due consideration to the condition of the affairs of the Corporation; 7.7.2. may use and apply, in its discretion, any of the surplus of the Corporation in purchasing or acquiring any shares of capital stock of the Corporation, or purchase warrants therefor, in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness; and 7.7.3. may set aside from time to time out of such surplus or net profits such sum or sums as, in its discretion, it may think proper, as a reserve fund to meet contingencies, or for equalizing dividends or for the purpose of maintaining or increasing the property or business of the Corporation, or for any purpose it may think conducive to the best interests of the Corporation. ARTICLE VIII INDEMNIFICATION 8.1. INDEMNITY UNDERTAKING. To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal 29 representative, is or was a Director or officer of the Corporation, or is or was serving as a director, officer, employee or agent or in any other capacity at the request of the Corporation for any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity") while serving as a Director or officer of the Corporation, against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. To the extent specified by the Board at any time and to the extent not prohibited by law, the Corporation may indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed Proceeding, whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person is or was an employee or agent of the Corporation, or is or was serving as a director, officer, employee or agent or in any other capacity at the request of the Corporation for any Other Entity, against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. 8.2. ADVANCEMENT OF EXPENSES. The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including 30 attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the General Corporation Law, such expenses incurred by or on behalf of any Director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses. 8.3. RIGHTS NOT EXCLUSIVE. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, the Certificate of Incorporation, these By-laws, any agreement (including any policy of insurance purchased or provided by the Corporation under which directors, officers, employees and other agents of the Corporation are covered), any vote of Stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. 8.4. CONTINUATION OF BENEFITS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall continue as to a person who has ceased to be a Director or officer (or other person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person. 8.5. INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or 31 agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article 8, the Certificate of Incorporation or under section 145 of the General Corporation Law or any other provision of law. 8.6. BINDING EFFECT. The provisions of this Article 8 shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time while this Article 8 is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer or other person intend to be, and shall be legally bound. No repeal or modification of this Article 8 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. 8.7. PROCEDURAL RIGHTS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board, its 32 independent legal counsel and its Stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board, its independent legal counsel and its Stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding. 8.8. SERVICE DEEMED AT CORPORATION'S REQUEST. Any Director or officer of the Corporation serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation. 8.9. ELECTION OF APPLICABLE LAW. Any person entitled to be indemnified or to reimbursement or advancement of expenses as a matter of right pursuant to this Article 8 may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought. 33 ARTICLE IX BOOKS AND RECORDS 9.1. BOOKS AND RECORDS. There shall be kept at the principal office of the Corporation correct and complete records and books of account recording the financial transactions of the Corporation and minutes of the proceedings of the Stockholders, the Board and any committee of the Board. The Corporation shall keep at its principal office, or at the office of the transfer agent or registrar of the Corporation, a record containing the names and addresses of all Stockholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof. 9.2. FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible written form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. 9.3. INSPECTION OF BOOKS AND RECORDS. Except as otherwise provided by law, the Board shall determine from time to time whether, and, if allowed, when and under what conditions and regulations, the accounts, books, minutes and other records of the Corporation, or any of them, shall be open to the Stockholders for inspection. ARTICLE X SEAL The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The 34 seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced. ARTICLE XI FISCAL YEAR The fiscal year of the Corporation shall be fixed, and may be changed, by resolution of the Board. ARTICLE XII PROXIES AND CONSENTS Unless otherwise directed by the Board, the Chairman, the CEO, any Vice President, the Secretary or the Treasurer, or any one of them, may execute and deliver on behalf of the Corporation proxies respecting any and all shares or other ownership interests of any Other Entity owned by the Corporation appointing such person or persons as the officer executing the same shall deem proper to represent and vote the shares or other ownership interests so owned at any and all meetings of holders of shares or other ownership interests, whether general or special, and/or to execute and deliver consents respecting such shares or other ownership interests; or any of the aforesaid officers may attend any meeting of the holders of shares or other ownership interests of such Other Entity and thereat vote or exercise any or all other powers of the Corporation as the holder of such shares or other ownership interests. ARTICLE XIII EMERGENCY BY-LAWS Unless the Certificate of Incorporation provides otherwise, the following provisions of this Article 13 shall be effective during an emergency, which is defined as 35 when a quorum of the Corporation's Directors cannot be readily assembled because of some catastrophic event. During such emergency: 13.1. NOTICE TO BOARD MEMBERS. Any one member of the Board or any one of the following officers: Chairman, CEO, any Vice President, Secretary, or Treasurer, may call a meeting of the Board. Notice of such meeting need be given only to those Directors whom it is practicable to reach, and may be given in any practical manner, including by publication and radio. Such notice shall be given at least six hours prior to commencement of the meeting. 13.2. TEMPORARY DIRECTORS AND QUORUM. One or more officers of the Corporation present at the emergency Board meeting, as is necessary to achieve a quorum, shall be considered to be Directors for the meeting, and shall so serve in order of rank, and within the same rank, in order of seniority. In the event that less than a quorum of the Directors are present (including any officers who are to serve as Directors for the meeting), those Directors present (including the officers serving as Directors) shall constitute a quorum. 13.3. ACTIONS PERMITTED TO BE TAKEN. The Board as constituted in Section 13.2, and after notice as set forth in Section 13.1 may: 13.3.1. prescribe emergency powers to any officer of the Corporation; 13.3.2. delegate to any officer or Director, any of the powers of the Board; 13.3.3. designate lines of succession of officers and agents, in the event that any of them are unable to discharge their duties; 36 13.3.4. relocate the principal place of business, or designate successive or simultaneous principal places of business; and 13.3.5. take any other convenient, helpful or necessary action to carry on the business of the Corporation. ARTICLE XIV AMENDMENTS These By-laws may be amended or repealed and new By-laws may be adopted by a vote of the Stockholders holding shares entitled to vote in the election of Directors or by the Board. Any By-laws adopted or amended by the Board may be amended or repealed by the Stockholders entitled to vote thereon. Amended and Restated as of _________ __, 2005 PLAN EXHIBIT 3 -------------- PENN TRAFFIC CREDITOR TRUST AGREEMENT DATED AS OF _____________, 2005 AMONG THE PENN TRAFFIC COMPANY THE OTHER AFFILIATED DEBTORS PARTY HERETO AND AS TRUSTEE TABLE OF CONTENTS ARTICLE I ESTABLISHMENT OF TRUST...............................................2 Section 1.1 Creation and Name........................................2 Section 1.2 Declaration of Trust.....................................2 Section 1.3 Purposes of Trust........................................2 Section 1.4 Trustee's Acceptance.....................................3 ARTICLE II DEFINITIONS.........................................................3 Section 2.1 Certain Terms Defined in the Plan........................3 Section 2.2 "Allowed Claim"..........................................3 Section 2.3 "Bankruptcy Code"........................................3 Section 2.4 "Beneficiary List".......................................3 Section 2.5 "Beneficiaries"..........................................3 Section 2.6 "Business Day"...........................................3 Section 2.7 "Cash"...................................................3 Section 2.8 "Causes of Action".......................................3 Section 2.9 "Claim"..................................................4 Section 2.10 "Code"...................................................4 Section 2.11 "Debtors"................................................4 Section 2.12 "Debtors' Estates".......................................4 Section 2.13 "Disputed Claim".........................................4 Section 2.14 "Distribution Reserve Account"...........................4 Section 2.15 "Face Amount"............................................4 Section 2.16 "Final Order"............................................4 Section 2.17 "Funding Contributions"..................................4 Section 2.18 "Initial Distribution Date"..............................4 Section 2.19 "Initial Installments"...................................4 Section 2.20 "Net Trust Recoveries"...................................4 Section 2.21 "Plan"...................................................5 Section 2.22 "Pro Rata"...............................................5 Section 2.23 "Reorganized Debtors"....................................5 Section 2.24 "Trust"..................................................5 Section 2.25 "Trust Advisory Board"...................................5 Section 2.26 "Trust Assets"...........................................5 Section 2.27 "Trust Claims"...........................................5 Section 2.28 "Trust Claim Defendant"..................................5 Section 2.29 "Trust Distribution Date"................................5 Section 2.30 "Trust Expenses".........................................6 Section 2.31 "Trust Recoveries".......................................6 i Section 2.32 "Trust Term".............................................6 Section 2.33 "Trustee"................................................6 Section 2.34 "Trustee's Professionals"................................6 ARTICLE III FUNDING OF THE TRUST...............................................6 Section 3.1 Initial Installments.....................................6 Section 3.2 Additional Funding Contributions.........................6 Section 3.3 Unused Funding Contributions.............................7 ARTICLE IV TRUST CLAIMS........................................................7 Section 4.1 Liquidation of Trust Claims..............................7 Section 4.2 Intervention.............................................7 Section 4.3 Trust Recoveries Distribution and Reserve................7 ARTICLE V DISTRIBUTION OF TRUST ASSETS.........................................9 Section 5.1 Allowed Claims...........................................9 Section 5.2 Delivery of Distributions...............................10 Section 5.3 Undeliverable Distributions.............................10 Section 5.4 Fractional Dollars......................................10 ARTICLE VI DISPUTED CLAIMS....................................................10 Section 6.1 Deposit into Reserve....................................10 Section 6.2 Distributions After Allowance...........................11 Section 6.3 Intentionally Left Blank................................11 Section 6.4 Trust Claims Pending....................................11 ARTICLE VII GENERAL POWERS, RIGHTS AND OBLIGATIONS OF THE TRUSTEE.............12 Section 7.1 Appointment of Trustee..................................12 Section 7.2 Legal Title.............................................12 Section 7.3 General Powers..........................................12 Section 7.4 Retention of Attorneys, Accountants and Other Professionals...........................................14 Section 7.5 Co-Trustees or Separate Trustees........................15 Section 7.6 Compensation of Trustee and its Professionals...........15 Section 7.7 Standard of Care; Indemnification; Exculpation..........16 Section 7.8 Reliance by Trustee.....................................17 Section 7.9 Action Upon Instructions................................17 Section 7.10 Investment Obligations..................................17 Section 7.11 Intentionally Left Blank................................17 Section 7.12 Tax Filings and Notices.................................18 Section 7.13 Compliance with Securities Laws.........................18 Section 7.14 Timely Performance......................................18 Section 7.15 Consultation with the Trust Advisory Board..............18 Section 7.16 Resignation.............................................18 ARTICLE VIII THE TRUST ADVISORY BOARD.........................................19 ii Section 8.1 Establishment of Trust Advisory Board...................19 Section 8.2 Composition; Replacement................................19 Section 8.3 By-Laws.................................................19 Section 8.4 Litigation of Trust Claims..............................19 Section 8.5 Settlement of Trust Claims..............................19 Section 8.6 Advice and Direction to Trustee.........................20 Section 8.7 Investments.............................................20 Section 8.8 Removal of Trustee; Removal of Trust Advisory Board Member..................................................20 Section 8.9 Appointment of Successor Trustee........................20 Section 8.10 Expenses................................................20 Section 8.11 Standard of Care; Exculpation...........................21 Section 8.12 Termination of the Trust Advisory Board.................21 ARTICLE IX COORDINATION WITH REORGANIZED DEBTORS..............................21 Section 9.1 Access to Debtors and Reorganized Debtors...............21 ARTICLE X RETENTION OF JURISDICTION...........................................22 ARTICLE XI TERMINATION........................................................23 ARTICLE XII MISCELLANEOUS.....................................................23 Section 12.1 Notices.................................................23 Section 12.2 Effectiveness...........................................24 Section 12.3 Intention of Parties to Establish Trust.................24 Section 12.4 Investment Company Act..................................24 Section 12.5 Taxation................................................25 Section 12.6 Counterparts............................................25 Section 12.7 Governing Law...........................................25 Section 12.8 Headings................................................25 Section 12.9 Interpretative Provisions...............................25 Section 12.10 Severability............................................25 Section 12.11 Amendments..............................................25 Section 12.12 Non-transferability of Beneficial Interests; Interests Beneficial Only; No Voting Rights; Successors.26 Section 12.13 No Suits by Claimholders................................26 Section 12.14 Irrevocability..........................................26 Section 12.15 Trust Continuance.......................................26 Section 12.16 Enforcement and Administration..........................26 iii PENN TRAFFIC CREDITOR TRUST AGREEMENT THIS TRUST AGREEMENT (the "Trust Agreement"), dated as of ____________, 2005, is entered into and executed by and among THE PENN TRAFFIC COMPANY, a Delaware corporation, debtor and debtor-in-possession in the Chapter 11 Cases referred to below ("Penn Traffic"), the undersigned affiliated Debtors, debtors and debtors-in-possession in such Chapter 11 Cases (together with Penn Traffic, collectively, the "Debtors", as hereinafter further defined), as settlors, _______ as Trustee (the "Trustee"), and the undersigned Reorganized Debtors (as defined below). RECITALS: WHEREAS, this Trust Agreement is executed to facilitate the implementation of (a) the First Amended Joint Plan of Reorganization of Penn Traffic Company and Its Affiliated Debtors and Debtors-in-Possession, dated December __, 2004 (as amended, modified or supplemented, the "Plan"), which Plan provides for the establishment of the Penn Traffic Creditor Trust (as defined below) created by this Trust Agreement and the retention and preservation of the Trust Assets (as defined in the Plan) by the Trustee, all for the benefit of the holders of Allowed Unsecured Claims (as defined in the Plan) in Class 3 to the extent that such holders of Allowed Class 3 Unsecured Claims are entitled to share in Trust Recoveries (as defined below) in accordance with the terms of the Plan) (collectively, the "Beneficiaries") and (b) the other Articles of the Plan that deal with the collection, liquidation, and distribution of the Trust Assets, including the litigation of Trust Claims (as defined in the Plan), as required by the Plan; and WHEREAS, the Trust (as defined below) is organized for the primary purposes of (x) holding and preserving the value of the Trust Assets for distribution, (y) litigating Trust Claims, and (z) making distribution of Trust Recoveries (as defined below), as set forth in the Plan; and WHEREAS, the Trustee's activities, powers and duties are those determined to be reasonably necessary to, and consistent with, accomplishment of these purposes; and WHEREAS, the Plan contemplates, among other things, the litigation and settlement of Trust Claims and distribution of the net proceeds therefrom to the Beneficiaries, all as described in greater detail in the Plan and in this Trust Agreement; and WHEREAS, pursuant to the Plan, the Trust is being created to litigate and settle Trust Claims on behalf, and for the benefit, of the Beneficiaries and to make distributions to the Beneficiaries of Trust Recoveries and other Trust Assets, in accordance with the Plan and this Trust Agreement; and WHEREAS, under the terms of the Plan and the Confirmation Order (as defined in the Plan), effective as of the Effective Date (as defined in the Plan), the Debtors' Estates (as defined below) shall be deemed to have irrevocably granted, transferred, conveyed, and delivered to the Trustee, on behalf of, and for the benefit of, the Beneficiaries, control of, and all the rights, title and interests in and to, the Trust Assets, with no reversionary interest therein in favor of the Debtors and/or the Reorganized Debtors; and WHEREAS, on ___________, 2005, the Bankruptcy Court (as defined in the Plan) entered the Confirmation Order; and WHEREAS, the Reorganized Debtors (as defined below) are joining in the execution of this Trust Agreement as of the Effective Date in accordance with the Plan; NOW, THEREFORE, in consideration of the premises and agreements contained herein, the parties hereto agree as follows: ARTICLE I ESTABLISHMENT OF TRUST SECTION 1.1 Creation and Name. In accordance with the Plan, there is hereby created a trust which shall be known as the "Penn Traffic Creditor Trust," which is the Trust created pursuant to Article VII of the Plan. SECTION 1.2 Declaration of Trust. In consideration of the confirmation of the Plan under the Bankruptcy Code, the Debtors, the Reorganized Debtors and the Trustee have executed this Trust Agreement and, effective on the Effective Date of the Plan, in accordance with Article 7.2(A) of the Plan, the Debtors' Estates are hereby deemed to have irrevocably assigned, transferred and conveyed, to the Trustee, and to its successors and assigns, all the right, title and interests of the Debtors and the Debtors' Estates in and to the Trust Assets, with no reversionary interest whatsoever therein of the Debtors and the Reorganized Debtors, to have and to hold unto the Trustee and its successors and assigns forever, in trust nevertheless, under and subject to the terms and conditions set forth in this Trust Agreement and in the Plan for the benefit of the Beneficiaries and their successors and assigns permitted under the Plan and this Trust Agreement, as provided for in the Plan and in this Trust Agreement. The use and distribution of Trust Recoveries (including, without limitation, Funding Contributions) shall be made in accordance with this Trust Agreement and the Plan. SECTION 1.3 Purposes of Trust. The Trust is organized for the primary purposes of litigating and settling the Trust Claims transferred to it and distributing to the Beneficiaries the proceeds of the Trust Claims and the Trust Recoveries therefrom, along 2 with all other Trust Assets, with no objective to engage in the conduct of a trade or business. In furtherance of such purposes with respect to the Trust Claims (subject to authorization by the Trust Advisory Board, by its majority vote), the Trustee shall be responsible for pursuing, litigating, settling or waiving all Trust Claims including, without limitation, any causes of action, counterclaims and defenses which are transferred to the Trust, and to be the representative of all Beneficiaries in all litigation relating to Trust Claims, and to perform all obligations specified for the Trustee under the Plan. In the event of any inconsistency between the recitation of the duties and powers of the Trustee as set forth in the Trust Agreement and as set forth in the Plan, the provisions of this Trust Agreement shall govern. SECTION 1.4 Trustee's Acceptance. The Trustee accepts the trust imposed on the Trustee by this Trust Agreement and agrees to observe and perform that trust, on and subject to the terms and conditions set forth in this Trust Agreement. In connection with and in furtherance of the purposes of the Trust, the Trustee hereby expressly accepts the transfer of the Trust Assets, subject to the provisions of the Confirmation Order, the Plan and this Trust Agreement, and the Trustee hereby further expressly assumes, undertakes and shall control the litigation of Trust Claims, subject to the terms of this Trust Agreement. ARTICLE II DEFINITIONS SECTION 2.1 CERTAIN TERMS DEFINED IN THE PLAN. THE CAPITALIZED TERMS USED BUT NOT DEFINED IN THIS TRUST AGREEMENT SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE PLAN. SECTION 2.2 "ALLOWED CLAIM" has the meaning set forth in the Plan. SECTION 2.3 "BANKRUPTCY CODE" means 11 U.S.C. Sections 101-1330, as amended. SECTION 2.4 "BENEFICIARY LIST" has the meaning set forth in Section 5.1 hereof. SECTION 2.5 "BENEFICIARIES" has the meaning set forth in the Recitals hereof. SECTION 2.6 "BUSINESS DAY" has the meaning set forth in the Plan. SECTION 2.7 "CASH" has the meaning set forth in the Plan. SECTION 2.8 "CAUSES OF ACTION" means any and all claims, actions, causes of action, suits, accounts, controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, and rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or 3 assertable directly or derivatively, in law, equity or otherwise, including, without limitation, Trust Claims. SECTION 2.9 "CLAIM" has the meaning set forth in the Plan. SECTION 2.10 "CODE" means the Internal Revenue Code of 1986, as amended, and any successor thereto. SECTION 2.11 "DEBTORS" has the meaning set forth in the Recitals hereof and includes in addition (and not in limitation) each Debtor's predecessor-in-interest as in existence immediately prior to the filing of the Chapter 11 Cases. SECTION 2.12 "DEBTORS' ESTATES" has the meaning set forth in the Plan. SECTION 2.13 "DISPUTED CLAIM" has the meaning set forth in the Plan. SECTION 2.14 "DISTRIBUTION RESERVE ACCOUNT" means, individually and collectively, one or more bank and/or other investment accounts established and maintained by the Trustee, as shall be directed by the Trust Advisory Board, into which the Trustee shall, in accordance with Section 5.3 and Section 6.1 of this Trust Agreement, deposit undeliverable distributions and Trust Recoveries that are not then distributable to a holder of a Disputed Claim and shall be held by the Trustee, pending a final determination as to Allowance of such Disputed Claim. SECTION 2.15 "FACE AMOUNT" means (a) when used in reference to a Disputed or disallowed claim, the full stated liquidated amount claimed by the Claim holder in any proof of claim timely filed with the Bankruptcy Court or otherwise deemed timely filed by any Final Order of the Bankruptcy Court or other applicable bankruptcy law, and (b) when used in reference to an Allowed Claim, the allowed amount of such Claim. SECTION 2.16 "FINAL ORDER" has the meaning set forth in the Plan. SECTION 2.17 "FUNDING CONTRIBUTIONS" means funding that shall be made by the Reorganized Debtors to the Penn Traffic Creditor Trust on and after the Effective Date, in the amounts and to the extent required by Article 7.3(D) of the Plan. SECTION 2.18 "INITIAL DISTRIBUTION DATE" has the meaning set forth in the Plan. SECTION 2.19 "INITIAL INSTALLMENTS" means the following Funding Contributions to be paid by the Reorganized Debtors in accordance with Section 7.3(D) of the Plan; (i) $300,000 on the Effective Date and (ii) four (4) quarterly installments in the amount of $50,000 each to be paid by the Reorganized Debtors to the Penn Traffic Creditor Trust beginning on the three (3) month anniversary of the Effective Date. SECTION 2.20 "NET TRUST RECOVERIES" means the amount by which the aggregate amount of Trust Recoveries exceeds the aggregate amount of (a) the compensation paid to the Trustee pursuant to Section 7.6 below and reasonable and necessary expenses incurred by the Trustee or to be incurred by the Trustee (as estimated by the Trustee in 4 consultation with the Trust Advisory Board and including, without limitation, the fees and expenses of the Trustee's Professionals) in fulfilling the obligations set forth in the Plan and this Trust Agreement plus (b) the reasonable and necessary expenses incurred or to be incurred by the Trust Advisory Board (as estimated by the Trust Advisory Board and including, without limitation, the fees and expenses of any counsel and other professionals retained directly by the Trustee Advisory Board, separate from the Trustee's Professionals). SECTION 2.21 "PLAN" has the meaning set forth in the Recitals hereof. SECTION 2.22 "PRO RATA" means, at any time, the proportion that the Face Amount of a Claim in a particular Class or Classes bears to the aggregate Face Amount of all Claims (including Disputed Claims, but excluding disallowed claims) in such Class or Classes, unless the Plan provides otherwise. SECTION 2.23 "REORGANIZED DEBTORS" has the meaning set forth in the Plan. SECTION 2.24 "TRUST" means the trust established pursuant to the Article VII of the Plan and under this Trust Agreement. SECTION 2.25 "TRUST ADVISORY BOARD" means the board that has been, or is about to be, created pursuant to Article 7.4 of the Plan for the purpose of either advising or, in the case of certain proposed actions, providing direction or authorization to the Trustee (as required by the Plan and/or this Trust Agreement) with respect to actions and decisions affecting the Trust. SECTION 2.26 "TRUST ASSETS" means: (a) those assets irrevocably assigned, transferred, conveyed and delivered to the Trust on the Effective Date pursuant to Article 7.2 of the Plan, which are: (i) all Trust Claims, and (ii) the Funding Contributions; (b) any additional Funding Contributions required by Article 7.3(D) of the Plan after the Effective Date, (c) all Trust Recoveries at any time received by the Trustee in respect of the Trust Claims, and (d) all income at any time received by the Trustee in respect of any of the foregoing. SECTION 2.27 "TRUST CLAIMS" has the meaning set forth in the Plan. SECTION 2.28 "TRUST CLAIM DEFENDANT" means any Person who is (a) a defendant in any Cause of Action arising out of any Trust Claim that was commenced by the Trustee at any time on or after the Effective Date or (b) is identified by the Trustee in good faith on or before the Initial Distribution Date as a potential defendant in any Cause of Action arising out of the Trust Claims that the Trustee shall or may commence, as determined by the Trustee based on evidence relating to the Trust Claims then available to the Trustee. SECTION 2.29 "TRUST DISTRIBUTION DATE" has the meaning set forth in Section 4.3(c) hereof. 5 SECTION 2.30 "TRUST EXPENSES" means all reasonable costs, expenses and fees paid or incurred or to be incurred (as estimated by the Trustee in consultation with the Trust Advisory Board) by the Trustee in the administration of the Trustee's duties or as contemplated pursuant to this Trust Agreement, including, without limitation, the compensation paid to and expenses incurred or to be incurred (as estimated by the Trustee in consultation with the Trust Advisory Board) by the Trustee and the expenses incurred or to be incurred by members of the Trust Advisory Board (as estimated by the Trust Advisory Board), the fees and expenses of the Trustee's Professionals and the fees and expenses of any counsel and other professionals directly retained by the Trust Advisory Board (separate from the Trustee's Professionals), all as provided for in this Trust Agreement. SECTION 2.31 "TRUST RECOVERIES" means any and all proceeds received by the Trust arising from a Trust Claim, including, without limitation, (a) the prosecution to, and collection of, a final judgment with respect to a Trust Claim, and (b) the settlement or other compromise of a Trust Claim. SECTION 2.32 "TRUST TERM" has the meaning set forth in Section 7.3(B) of the Plan. SECTION 2.33 "TRUSTEE" means the trustee under the Trust, or any successor, as designated by a majority vote of the Trust Advisory Board pursuant to Article 7.4(f) of the Plan. SECTION 2.34 "TRUSTEE'S PROFESSIONALS" has the meaning set forth in Section 7.4 of this Agreement. ARTICLE III FUNDING OF THE TRUST SECTION 3.1 Initial Installments. In accordance with the Plan, the Reorganized Debtors shall contribute the following to the Trust to be utilized to pay the costs and expenses associated with the administration of the Trust: (i) $300,000 on the Effective Date and (ii) four (4) quarterly installments of $50,000 each to be paid by the Reorganized Debtors to the Trust beginning on the three (3) month anniversary of the Effective Date. If the Reorganized Debtors fail to pay any of the Initial Installments within five (5) business days after written notice of the Trust to the Reorganized Debtors, all remaining Initial Installments shall become immediately due and payable to the Trust. SECTION 3.2 Additional Funding Contributions. In accordance with the Plan, the Trustee shall have the right to seek an order of the Bankruptcy Court requiring the Reorganized Debtors to make additional Funding Contributions in excess of the Initial Installments at any time during the Trust Term in the maximum aggregate amount of $500,000 in excess of the Initial Installments. 6 SECTION 3.3 Unused Funding Contributions. As of the termination of the Trust, if the Trustee has not commenced any litigations on behalf of the Trust, any unused Funding Contributions shall be disposed of at the discretion of the Trustee, as authorized by the Trust Advisory Board, by majority vote. ARTICLE IV TRUST CLAIMS SECTION 4.1 Liquidation of Trust Claims. (a) The Trustee shall take such steps as the Trustee deems necessary to investigate, pursue, litigate, settle and/or compromise or abandon the Trust Claims (provided that, any such litigation, settlement, compromise or abandonment shall be authorized by the Trust Advisory Board, by its majority vote), to reduce the Trust Claims to cash proceeds and to make distributions of the cash proceeds to the Beneficiaries as required under the Plan and this Trust Agreement. The Trustee's actions with respect to disposition of the Trust Claims shall in all events be taken in a manner so as reasonably to maximize the value of the Trust Claims. (b) The Trustee may transfer, sell, dispose of, settle or otherwise compromise or abandon the Trust Claims (or any of them) on the authorization of the Trust Advisory Board, by its majority vote. SECTION 4.2 Intervention. ON THE EFFECTIVE DATE, AND WITHOUT HAVING TO OBTAIN ANY FURTHER ORDER OF THE BANKRUPTCY COURT, THE TRUSTEE IS AUTHORIZED TO INTERVENE AS PLAINTIFF, MOVANT OR ADDITIONAL PARTY, AS APPROPRIATE, IN ANY CAUSES OF ACTION (WHETHER ASSERTED IN ACTIONS, ADVERSARY PROCEEDINGS, CONTESTED MATTERS, AVOIDANCE ACTIONS OR MOTIONS OR OTHERWISE WHICH WERE FILED PRIOR TO THE EFFECTIVE DATE), WHERE THE SUBJECT MATTER OF ANY SUCH CAUSE OF ACTION INVOLVES A TRUST CLAIM. SECTION 4.3 Trust Recoveries Distribution and Reserve. (a) DISTRIBUTIONS OF TRUST RECOVERIES. Prior to distribution of any portion of the Trust Recoveries to any Beneficiaries, Trust Recoveries shall be first paid (i) to the Trustee, in accordance with Section 7.6(a), for the Trustee's compensation and reasonable and necessary expenses incurred and/or to be incurred (as estimated by the Trustee in consultation with the Trust Advisory Board) in fulfilling the Trustee's obligations set forth in the Plan and in this Trust Agreement, (ii) to the members of the Trust Advisory Board, in accordance with Section 8.10, for their reasonable and necessary expenses incurred in fulfilling the obligations of the Trust Advisory Board set forth in the Plan and in this Trust Agreement and (iii) to the Trustee's Professionals (defined below), in accordance with Section 7.4 and 7.6(b), for services rendered and expenses incurred in aiding in the performance of the Trustee's responsibilities. 7 (b) DISTRIBUTIONS OF NET TRUST RECOVERIES. The Trustee shall distribute Net Trust Recoveries as follows: first, to pay the Trust Expenses (in addition to those paid in accordance with Section 4.3(a) above, if any); and second, to the Beneficiaries, their respective Pro Rata shares thereof as required by the Plan and this Trust Agreement. For the purposes of this Section 4.3(b), the Funding Contributions shall not be included in the calculation of Net Trust Recoveries distributable to any Beneficiaries on any Trust Distribution Date, and shall not be distributed on any Trust Distribution Date or otherwise, until such time as the Trustee and the Trust Advisory Board have determined that all Trust Claims have been resolved and/or will not be further pursued. (c) TIME OF DISTRIBUTIONS. Distributions of Net Trust Recoveries by the Trustee to Beneficiaries, in accordance with their respective interests in the Trust as set forth in the Plan and in this Trust Agreement, shall be made at least semi-annually, beginning with a date in the calendar quarter that is not later than the end of the second calendar quarter after the Effective Date (each, such date, a "Trust Distribution Date)"; provided that, (i) the Trustee shall not distribute any Net Trust Recoveries to any Beneficiaries in a particular Class prior to the earliest date on which the Claimholders in such Class are entitled to receive Net Trust Recoveries in accordance with the Plan, (ii) the Trustee shall not be required to make any such semi-annual distribution if the Net Trust Recoveries and income therefrom (if any) available for distribution to the Beneficiaries are not sufficient, in the Trustee's discretion (after consultation with the Trust Advisory Board) to justify incurring the Trust Expenses necessarily associated with making distribution of monies, (iii) in connection with any interim (as opposed to final) distribution, the Trustee shall retain at least the amount of the Funding Contributions remitted to the Trustee pursuant to Article 7.3(D) of the Plan and Sections 3.1 and 3.2 of this Trust Agreement and (iv) concurrently with the termination of this Trust Agreement in accordance with Article 11 below, the Trustee shall distribute to the Beneficiaries, in accordance with Section 4.3(b) above, any amount of the Funding Contributions that has not been expended by the Trustee on Trust Expenses in the course of the winding up and final liquidation of the Trust. (d) DISTRIBUTION RESERVE ACCOUNT. The Trustee shall establish the Distribution Reserve Account as of the initial Trust Distribution Date. The Trustee shall deposit into the Distribution Reserve Account on each Trust Distribution Date, pending resolution of Disputed Claims, that portion of Trust Recoveries that would otherwise be distributable in accordance with the Plan in respect of such Disputed Claims, if such Disputed Claim had then constituted an Allowed Claim entitled to receive Trust Recoveries in accordance with the Plan. The amount of such deposits made by the Trustee into the Distribution Reserve Account on any Distribution Date shall be in an amount as directed by Reorganized Debtors pursuant to the Beneficiary List. The Trustee shall distribute the Net Trust Recoveries on deposit in the Distribution Reserve Account to the holder of any Disputed Claims that become Allowed Claims only upon the Trustee's receipt of written notice from Reorganized Debtors, in accordance with Section 5.1 below, that any such Disputed Claim has become an Allowed Claim, as applicable, and in accordance with the provisions of Section 6.2 below. 8 ARTICLE V DISTRIBUTION OF TRUST ASSETS SECTION 5.1 Allowed Claims. The Trustee shall deliver to the Reorganized Debtors written notice of the first Initial Distribution Date on which the Trustee intends to make the initial distribution of any Net Trust Recoveries. As soon as practicable after the Reorganized Debtors' receipt of such written notice, the Reorganized Debtors shall provide to the Trustee a list of all Beneficiaries who hold Allowed Claims, a list of holders of all Disputed Claims whose Pro Rata share of Trust Recoveries will be deposited by the Trustee into the Distribution Reserve Account in accordance with Section 4.3(d) above, and the Pro Rata share (i.e., the proportion determined in accordance with the Plan) in respect of each such Claim (both Allowed and Disputed), including the address, the name of a contact person (if known to the Reorganized Debtors) for each such Claimholder (both Allowed and Disputed) and the tax ID number or such Claimholder, all as then reflected on the books and records of the Debtors and Reorganized Debtors (such list being herein referred to as a "Beneficiary List"). The purpose of the Beneficiary List is to enable the Trustee to calculate as of such initial Trust Distribution Date hereunder the Pro Rata share of Trust Recoveries to be distributed to, or deposited into the Distribution Reserve Account for the account of, each Claimholder that is entitled under the Plan to share in Trust Recoveries. The Reorganized Debtors shall similarly deliver to the Trustee a revised, then current Beneficiary List as soon as practicable after the Trustee delivers notice of its intent to make additional distributions on any subsequent Trust Distribution Date, including a revised calculation of the Pro Rata share (i.e., the proportion determined in accordance with the Plan) of Trust Recoveries to be distributed to, or deposited into the Distribution Reserve Account, for the account of, each Claimholder as provided for above in this Section 5.1. If the Trustee or the Trust Advisory Board disagrees with any of the information set forth on a Beneficiary List delivered by the Debtors or Reorganized Debtors, then the Trustee shall so notify the Debtors or the Reorganized Debtors (as applicable) as soon as practicable, and the Debtors or the Reorganized Debtors (as applicable) and the Trustee shall cooperate and attempt to resolve any such differences as expeditiously as possible. In making distributions of Trust Recoveries to Beneficiaries in accordance with Section 5.2 below, the Trustee may, in the absence of manifest error, rely fully, without inquiry, upon the Beneficiary List most recently delivered by the Debtors or the Reorganized Debtors to the Trustee, and the Trustee shall be fully exculpated from any and all liability of any kind or nature to any Claimholder to the extent that the Trustee so relies upon any such Beneficiary List in making distributions of Net Trust Recoveries. Without limiting the generality of the exculpation of the Trustee provided for hereinabove, the Trustee shall have no liability to any Claimholder if a check payable to a Beneficiary in payment of such Beneficiary's share of Net Trust Proceeds is delivered to a Beneficiary's address listed on the then current Beneficiary List, but that is not the correct address for such Beneficiary, and such check is not returned to the Trustee and/or is cashed by a Person who is not an authorized agent of such Beneficiary. Nothing contained in this Trust Agreement, however, shall be deemed to limit or impair the right of any Claimholder to challenge in the Bankruptcy Court the Debtors' or the Reorganized Debtors' designation 9 as Disputed any portion of a Claim or the calculation of any Beneficiary's Share of Trust Recoveries to which any Allowed Claim is entitled in accordance with the Plan and this Trust Agreement. SECTION 5.2 Delivery of Distributions. Distributions by the Trustee shall be made to Beneficiaries at the addresses set forth in the Beneficiary List most recently provided to the Trustee by the Debtors or the Reorganized Debtors. SECTION 5.3 Undeliverable Distributions. (a) If any Beneficiary's distribution that has been made by the Trustee in accordance with Section 5.2 is returned to the Trustee as undeliverable, no further distributions to such Beneficiary shall be made unless and until the Trustee is notified by the Debtors, by the Reorganized Debtors or by such Beneficiary of such Beneficiary's then current address, at which time all missed distributions shall be made to such Beneficiary, without interest. Pending the Trustee's receipt of such current address and subject to Section 5.3(b) below, all missed distributions shall be deposited by the Trustee into the Distribution Reserve Account. (b) All requests by Beneficiaries for undeliverable distributions with respect to any Trust Distribution Date shall be made to the Trustee in writing, at its address set forth in Section 12.1 below, on or before six (6) months after the applicable Trust Distribution Date. After that date, all unclaimed property relating to such missed distributions shall revert to the Trust. Upon such reversion, the claim of any Beneficiary (and of any successor to or any assignee of such Beneficiary permitted pursuant to the Plan and this Trust Agreement) with respect to such property shall be discharged and forever barred, notwithstanding any federal or state escheat laws to the contrary. SECTION 5.4 Fractional Dollars. Notwithstanding anything to the contrary contained in this Trust Agreement, the Trustee shall not be required to make distributions or payments of fractions of dollars. Whenever any payment of a fraction of a dollar under the Plan or this Trust Agreement would otherwise be called for, the actual payment shall reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars or more being rounded up. ARTICLE VI DISPUTED CLAIMS SECTION 6.1 Deposit into Reserve. Distributions of Trust Assets with respect to Disputed Claims shall be deposited into the Distribution Reserve Account as set forth in Section 4.3(d) of this Trust Agreement. The amount deposited shall be determined by the Trustee based upon each Beneficiary List delivered to the Trustee, or as otherwise agreed to by the Debtors or the Reorganized Debtors (as applicable) and the Trustee in accordance with Section 5.1 (in cases where the Trustee and/or the Trust Advisory Board disagreed with any information contained in a Beneficiary List). The Trustee will also 10 place in the applicable Distribution Reserve Account any dividends, payments or other income received on account of the property withheld in the Distribution Reserve Account, to the extent that such property continues to be held in the Distribution Reserve Account at the time such dividends and/or other income are received by the Trustee. The Trustee may, in the Trustee's sole discretion, unless otherwise instructed by the Trust Advisory Board, invest any Cash that is withheld in the Distribution Reserve Account in a manner that will yield a reasonable net return, taking into account the safety of the investment. Notwithstanding any such investment and the addition to Trust Assets of any income earned in respect thereof, nothing in this Trust Agreement shall be deemed to entitle the holder of a Disputed Claim to postpetition interest on such Claim, in the event such Claim ultimately becomes an Allowed Claim. SECTION 6.2 Distributions After Allowance. (a) On the next Trust Distribution Date after the date when the order or judgment of the Bankruptcy Court allowing all or part of a Disputed Claim becomes a Final Order, the Trustee will distribute to the holders of Disputed Claims that have become Allowed any property in the Distribution Reserve Account that would have been distributed to such Claim holders on the Trust Distribution Dates on which distributions previously were made to Beneficiaries, if the Disputed Claims that have become Allowed had been Allowed Claims, on such earlier Trust Distribution Dates. All distributions made under this Section 6.2 of the Trust Agreement on account of an Allowed Claim will be made together with any dividends, payments or other distributions made on account of, as well as subject to any obligations arising from, the distributed property as if such Allowed Claim had been an Allowed Claim on the Trust Distribution Dates on which distributions were previously made to Beneficiaries. (b) After a Final Order has been entered, or other final resolution has been reached with respect to all Disputed Claims, any remaining property held in the Distribution Reserve Account will be distributed in accordance with the Plan and this Trust Agreement. SECTION 6.3 Intentionally Left Blank SECTION 6.4 Trust Claims Pending. Notwithstanding anything to the contrary contained in the Plan or in this Trust Agreement, the Trust Advisory Board may not authorize or direct the Trustee to pay, and the Trustee shall not pay, any distribution to Beneficiaries who have or may have any liability to the Trust with respect to a Trust Claim, which distribution may be paid, if at all, only after the holder of such Claim has discharged its liability to the Trust on account of such Trust Claim, by settlement or otherwise. 11 ARTICLE VII GENERAL POWERS, RIGHTS AND OBLIGATIONS OF THE TRUSTEE SECTION 7.1 Appointment of Trustee. Pursuant to Article VII of the Plan, the Trustee shall become the Trustee on the Effective Date. SECTION 7.2 Legal Title. The Trustee shall hold legal title to all Trust Assets except that the Trustee may, upon approval by the Trust Advisory Board, by its majority vote, cause legal title or evidence of title to any of the Trust Assets to be held by any nominee or person, on such terms, in such manner and with such power as the Trustee may determine advisable. SECTION 7.3 General Powers. (a) Except as otherwise provided in the Plan or in this Trust Agreement, and subject to the retained jurisdiction of the Bankruptcy Court as provided for in the Plan, but without prior or further authorization, the Trustee may control and exercise authority over the Trust Assets, over the acquisition, management and disposition thereof and over the management and conduct of the affairs of the Trust to the same extent as if the Trustee were the sole owner of the Trust Assets in its own right, provided, however, that such control and authority over the Trust Assets shall be subject to the provisions of Section 7.3(b) of this Trust Agreement and, at the sole discretion of the Trust Advisory Board, the Trust Advisory Board may, but is not required to (a) demand that the Trustee deliver a fiduciary bond or surety issued by such insurance company or other firm, and in such amount, as shall be reasonably acceptable to the Trust Advisory Board or (b) designate a Person to serve as a co-signatory with the Trustee on such bank and/or other investment accounts maintained from time to time by the Trustee, as shall be determined by the Trust Advisory Board. No Person dealing with the Trust shall be obligated to inquire into the Trustee's authority in connection with the acquisition, management or disposition of Trust Assets. (b) In connection with the management and use of the Trust Assets, subject to the delivery of a fiduciary bond or surety or signature of a co-signatory on Trust accounts, if and to the extent required by the Trust Advisory Board pursuant to Section 7.3(a) above, and except as otherwise expressly limited in this Trust Agreement, the Plan, or the Confirmation Order, the Trustee shall have, in addition to any powers conferred on the Trustee by any other provision of this Trust Agreement, and subject to the approval of the Trust Advisory Board, by its majority vote, the power to take any and all actions as are necessary or advisable to effectuate the purposes of the Trust, including, without limitation, the power and authority: (i) to accept the Trust Assets transferred and provided to the Trust under this Trust Agreement and the Plan; 12 (ii) to distribute the proceeds from the liquidation of the Trust Claims to Beneficiaries in accordance with the terms of the Plan and this Trust Agreement; (iii) to sell, convey, transfer, assign, liquidate, collect or abandon Trust Claims, or any part thereof or any interest therein, on such terms and for such consideration as the Trustee deems desirable or appropriate; (iv) to prosecute all Trust Claims and such other suits as may be necessary, appropriate or incident to the purposes of the Trust, including, without limitation, the prosecution of Trust Claims; (v) to endorse the payment of notes or other obligations of any person or to make contracts with respect thereto; (vi) to engage in all acts that would constitute ordinary course of business in performing the obligations of a trustee under a trust of this type; (vii) if authorized in writing by the Trust Advisory Board, to remove all or any of the Trust Assets or the situs of administration of the Trust from one jurisdiction to another jurisdiction at any time or from time to time; (viii) in connection with any property held under this Trust Agreement that is distributable or payable to a minor, to transfer and pay over all or any portion of the property to the minor, or to a guardian of the minor's property, whenever appointed, without requiring ancillary guardianship, or to the minor's parent or the person with whom the minor resides, or to any custodian under any Uniform Gifts to Minors Act or Uniform Transfer to Minor Act with power to select any person or trust company (including any fiduciary hereunder) to be such custodian and with power to extend such custodianship to age twenty-one (21) years, without any obligation to see to the use or application of the property or to make inquiry with respect to any other property available for the use of the minor, the receipt by such minor, guardian, parent, person or custodian to be a complete discharge as to such transfer or payment; (ix) if authorized in writing by all members of the Trust Advisory Board, to borrow sums of money, at any time and from time to time, for periods of time and on terms and conditions from persons or corporations (including any fiduciary hereunder) for purposes as may be deemed advisable, and secure such loans by the pledge or hypothecation of any property held under this Trust Agreement; (x) to establish the funds, reserves and accounts (other than investment accounts) within the Trust as deemed by the Trustee, in its discretion, to be useful in carrying out the purposes of the Trust; (xi) to sue and be sued and participate, as a party or otherwise, in any judicial, administrative, arbitration or other proceeding; 13 (xii) if authorized in writing by the Trust Advisory Board, in accordance with this Trust Agreement, to purchase insurance indemnifying the Trustee and the members of the Trust Advisory Board and to indemnify (and purchase insurance indemnifying) the employees, agents and representatives of the Trust or the Trustee (including, without limitation, the Trustee's Professionals), to the fullest extent that a corporation organized under the laws of the Trust's domicile is from time to time entitled to indemnify its directors, officers, employees, agents and representatives; (xiii) to delegate any or all of the discretionary power and authority herein conferred at any time with respect to all or any portion of the Trust to any one or more reputable individuals or, in connection with investments authorized by the Trust Advisory Board pursuant to Section 8.7, to recognized institutional advisors or investment managers, in each case without liability for any action taken or omission made because of such delegation, except for such liability as is expressly provided for in this Trust Agreement; (xiv) to consult with the Debtors and/or the Reorganized Debtors at such times and with respect to such issues relating to the conduct of the Trust as the Trustee considers desirable; and (xv) to perform such other acts and undertake such other conduct as the Trustee believes is necessary to carry out the purposes and intent of this Trust. (c) The Trustee shall not at any time, on behalf of the Trust or any Beneficiaries, enter into or engage in any trade or business, and the Trustee shall not use or dispose of any part of the Trust Assets in furtherance of any trade or business. SECTION 7.4 Retention of Attorneys, Accountants and Other Professionals. The Trustee shall, subject to the approval or direction of the Trust Advisory Board, by majority vote thereof, retain the following professionals ("Trustee's Professionals") to aid in the performance of its responsibilities pursuant to the terms of the Plan and this Trust Agreement including, without limitation, the litigation of Trust Claims and distribution of Trust Assets: (a) Such law firm(s) as counsel to the Trustee and the Trust as the Trustee may deem advisable to aid in the liquidation of the Trust Claims and to perform such other functions as may be appropriate to carry out the primary purposes of the Trust. The Trustee may commit the Trust to and shall pay such law firm(s) reasonable compensation from the Trust Assets for services rendered and expenses incurred, which expenses may include, without limitation, the fees and expenses of Persons retained by such counsel to perform any services or otherwise assist in connection with the prosecution of Trust Claims, including, without limitation, expert witnesses and consultants. The Trustee may also engage such law firm(s) on a contingent fee basis as permitted by applicable law; 14 (b) An independent public accounting firm to audit the financial books and records of the Trust, to prepare and file all federal, state and local tax returns and related tax forms on behalf of the Trust that the Trustee is obligated to prepare, provide and file pursuant to Section 7.12 below, and to perform such other reviews and/or audits as the Trustee may deem advisable to carry out the primary purposes of the Trust. The Trustee may commit the Trust to and shall pay such accounting firm reasonable compensation from the Trust Assets for services rendered and expenses incurred; and (c) Such forensic accountants, experts, advisors, consultants, investigators, appraisers, auctioneers or other professionals as are advisable to carry out the purposes of the Trust. The Trustee may commit the Trust to and shall pay all such Persons reasonable compensation from the Trust Assets for services rendered and expenses incurred. SECTION 7.5 Co-Trustees or Separate Trustees. In order to (and only to the extent necessary to) meet any legal requirements of any jurisdiction in which any of the Trust Assets may from time to time be located, the Trustee shall have the power to appoint one or more Persons who have been expressly approved by the Trust Advisory Board either to act as co-trustee jointly with the Trustee of all or any part of the Trust Assets or to act as separate trustee of all or any part of the Trust Assets and to vest in such Person or Persons, in such capacity, such title to the Trust Assets or any part thereof, and such rights, powers, duties, trusts or obligations as the Trust Advisory Board shall determine at any time may be necessary for the Trustee to perform its duties under this Trust Agreement, subject to such terms, conditions and limitations as shall be determined in any case by the Trust Advisory Board. SECTION 7.6 Compensation of Trustee and its Professionals. (a) The Trust Advisory Board shall negotiate with and authorize the payment of reasonable compensation from the Trust Assets to the Trustee (and to any co-trustee that may be appointed pursuant to Section 7.5 above) for services rendered and expenses incurred in fulfilling its duties pursuant to this Trust Agreement. The Trustee shall receive annual compensation of $_____ to be paid monthly commencing on the Effective Date and ending upon the termination of the Trust or commencement of litigation, in which case the Trustee's compensation will be renegotiated as described below. The fee payable for (i) the month in which the Effective Date occurs and (ii) the last month that the Trustee renders services to the Trust shall be payable on the first day of the month following the Effective Date or the month following the cessation of services, whichever is applicable, and shall be prorated based on a $______ monthly fee and calculated for the actual number of days during the month that the Trustee has served. In all other cases, the fee will be payable on the first Business Day of the month (being the first day on which banking institutions in the State of New York are not authorized or required by law or regulation to be closed) following the month for which service has been rendered. In the event that litigation is commenced by the Trustee on behalf of the Trust, the Trust Advisory Board members and the Trustee shall negotiate the amount and payment terms of the compensation to the Trustee for the period 15 following commencement of the litigation. If no agreement is reached, the parties may seek the determination of the Bankruptcy Court as to reasonable compensation. The compensation and reimbursement of expenses of the Trustee shall be paid out of Trust Assets. (b) On or before the last day of each month following the month for which compensation is sought, each of the Trustee's Professionals seeking compensation shall serve a monthly statement on the Trustee and the Trust Advisory Board; provided, however, that failure of any of the Trustee's Professionals to serve a monthly statement on the Trustee and Advisory Board for any one or more months shall not waive or impair the right of such Trustee's Professionals to subsequently seek compensation for all or any number of such months in a later statement delivered to the Trustee and the Trust Advisory Board. The Trustee and Trust Advisory Board will have fifteen (15) days from the date such statement is received to review the statement and object to such statement by serving a written objection on the Trustee's Professional setting forth the precise nature of the objection and the amount at issue. At the expiration of the fifteen (15) day period, the Trustee shall promptly pay out of Trust Assets 100% of the amounts requested, except for the portion of such fees and disbursements to which an objection has been made. The parties shall attempt to consensually resolve objections, if any, to any monthly statement. If the parties are unable to reach a consensual resolution of any such objection, the party which received an objection to its fees may seek payment of such fees by filing a motion with the Bankruptcy Court on proper notice to the Trustee and the Trust Advisory Board. SECTION 7.7 Standard of Care; Indemnification; Exculpation. The Trustee shall perform the duties and obligations imposed on the Trustee by this Trust Agreement with reasonable diligence and care under the circumstances. The Trustee shall not be personally liable to the Trust or to any Beneficiary (or any successor of such entities) for any reason whatsoever, except for such of its own acts as shall constitute willful misconduct, gross negligence, willful disregard of the Trustee's duties or material breach of this Trust Agreement. Except as aforesaid, the Trustee shall be defended, held harmless and indemnified from time to time from the Trust Assets (but not from or by the Beneficiaries or any of the parties released in the Plan), against any and all losses, claims, costs, expenses and liabilities to which the Trustee may be subject by reason of the Trustee's execution in good faith of the Trustee's duties under this Trust Agreement. The Trustee's officers, employees, agents (including, without limitation, the Trustee's Professionals) and any co-trustees appointed pursuant to Section 7.5 above may be likewise defended, held harmless and indemnified upon authorization of the Trust Advisory Board. Without limiting the generality of the foregoing, the Trustee shall have no liability to any Beneficiary on account of the Trustee's investment or non-investment of any Trust Assets or any losses with respect to any such investments of Trust Assets, provided such investments are made, or the Trustee's decision not to invest any Trust Assets in any case is made, in accordance with the terms of this Trust Agreement. The Trustee shall not be obligated to give any bond or surety or other security for the performance of any of its duties, unless otherwise required by the Trust Advisory Board pursuant to Section 7.3(a) above or otherwise ordered by the Bankruptcy Court and, if so 16 otherwise required or ordered, all costs and expenses of procuring any such bond shall be deemed Trust Expenses. SECTION 7.8 Reliance by Trustee. The Trustee may rely, and shall be fully protected personally in acting upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order or other instrument or document that the Trustee has no reasonable belief to be other than genuine and to have been signed or presented other than by the proper party or parties or, in the case of facsimile transmissions, to have been sent other than by the proper party or parties, in each case without obligation to satisfy itself that the same was given in good faith and without responsibility for errors in delivery, transmission or receipt. In the absence of the Trustee's willful misconduct, gross negligence, willful disregard of the Trustee's duties or material breach of this Trust Agreement, the Trustee may rely as to the truth of statements and correctness of the facts and opinions expressed therein and shall be fully protected personally in acting thereon. The Trustee may consult with legal counsel and shall be fully protected in respect of any action taken or suffered by the Trustee in accordance with the opinion of legal counsel (whether or not written). The Trustee may at any time seek instructions from the Bankruptcy Court concerning the acquisition, management or disposition of the Trust Assets. SECTION 7.9 Action Upon Instructions. If in performing the Trustee's duties under this Trust Agreement, the Trustee is required to decide between alternative courses of action, or the Trustee is unsure of the application of any provision of this Trust Agreement or the Plan, then the Trustee may promptly deliver a notice to the Trust Advisory Board requesting written instructions as to the course of action to be taken by the Trustee. If the Trustee does not receive such written directions within ten (10) Business Days after the Trustee has delivered such notice, the Trustee may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as the Trustee shall deem advisable. If the Trustee does not receive direction from the Trust Advisory Board within such ten (10) Business Day period or the Trustee believes that a court order is necessary or advisable to protect the interests of the Beneficiaries or to otherwise determine the Trustee's rights or duties in any respect under this Trust Agreement, then the Trustee may apply to the Bankruptcy Court for a determination as to the course of action to be taken by the Trustee. SECTION 7.10 Investment Obligations. The Trustee shall invest and reinvest the liquid Trust Assets consistent with the obligations of a trustee under Bankruptcy Code section 345 and otherwise pursuant to any Trust Advisory Board authorization in accordance with Section 8.7. The Trustee shall not be liable in any way for any loss or other liability arising from any investment, or the sale or other disposition of any investment, made in accordance with this Section 7.10, except for any such loss or liability arising from the Trustee's gross negligence, willful misconduct or bad faith. SECTION 7.11 Intentionally Left Blank 17 SECTION 7.12 Tax Filings and Notices. The Trustee shall prepare and provide to, or file with, the appropriate taxing authorities and other parties such notices, tax returns and other filings, including all federal, state and local tax returns for the Trust, as may be required under the Code, the Plan, or as may be required by applicable law of other jurisdictions including, if required under applicable law, notices required to report interest or dividend income ("Tax Reports"). To the extent required by applicable law and, if not so required, then when specifically requested by a Beneficiary in writing, the Trustee shall provide such Beneficiary with such tax information as is necessary for the preparation by such Beneficiary of such Beneficiary's income tax return. If such tax information is provided at the specific request of a Beneficiary (and not as required by applicable law), then such Beneficiary shall pay a reasonable fee to the Trustee, in an amount to be then determined by the Trustee, together with all costs and expenses incurred by the Trustee in providing such tax information to such Beneficiary. In connection with the Trustee's performance of its duties pursuant to this Section 7.12, the Trustee may require any Beneficiary to furnish to the Trustee its employer or taxpayer identification number as assigned by the Internal Revenue Service, together with such other information, returns or forms as the Trustee may determine are required, and the Trustee may condition any distribution of Net Trust Recoveries to any Beneficiary upon such receipt of such identification number, any other information and returns and forms as are required for the Trustee to comply with Internal Revenue Service requirements. The Trustee may consult with the tax department of Reorganized Penn Traffic, in advance of issuing or filing any Tax Reports, and shall in good faith consider (but shall have no obligation to accept or comply with) all reasonable suggestions of such tax department. The Trustee shall cooperate with and provide Reorganized Debtors with all information reasonably requested in connection with tax matters of the Reorganized Debtors, all at the sole cost and expense of Reorganized Debtors. SECTION 7.13 Compliance with Securities Laws. If and to the extent required by applicable federal and/or state securities laws, the Trustee shall file with the Securities and Exchange Commission and other applicable federal and state governmental agencies the reports and other documents and take any other actions necessary to comply with such federal or state securities laws. SECTION 7.14 Timely Performance. The Trustee will make continuing efforts to prosecute or settle the Trust Claims, make timely distributions, and not unduly prolong the duration of the Trust. SECTION 7.15 Consultation with the Trust Advisory Board. The Trustee shall consult with the Trust Advisory Board regularly and at all such times when the Trustee deems it necessary or appropriate in connection with carrying out the purposes of the Trust and shall obtain approvals from the Trust Advisory Board as required under the Plan and this Trust Agreement. SECTION 7.16 Resignation. The Trustee may resign as Trustee by giving written notice of its resignation to the Trust Advisory Board. The Trustee shall continue to serve as trustee for the shorter of (a) 90 days following the tender of the notice of resignation 18 and (b) until the appointment of a successor Trustee shall become effective in accordance with Section 8.9 of this Trust Agreement. ARTICLE VIII THE TRUST ADVISORY BOARD SECTION 8.1 Establishment of Trust Advisory Board. On the Effective Date, the Trust Advisory Board shall be established, using the procedures described in the Article VII of Plan. The members of the Trust Advisory Board shall disclose to the Trustee and all other members of the Trust Advisory Board whether any general unsecured claim or equity interest (relating to the Debtors or the Reorganized Debtors) that is held by them personally, by any relative or by any entity with which they are employed or affiliated, has been sold, transferred or otherwise assigned, disposed of or satisfied by any entity other than the Trust. SECTION 8.2 Composition; Replacement. The Trust Advisory Board shall be comprised of three (3) members and the initial three (3) members shall be designated in accordance with the procedures described in Article VII of the Plan. In the case of an inability or unwillingness of any member of the Trust Advisory Board to serve subsequent to his or her original appointment and acceptance, such member shall be replaced by designation of the remaining members of the Trust Advisory Board. If any position on the Trust Advisory Board remains vacant for more than thirty (30) days, such vacancy may be filled within fifteen (15) days thereafter by the designation of the Trustee without the requirement of a vote by the other members of the Trust Advisory Board. Each replacement member of the Trust Advisory Board must be a Beneficiary of this Trust. The Trust Advisory Board will continue to fully function even while a position on the Trust Advisory Board remains vacant. SECTION 8.3 By-Laws. The Trust Advisory Board shall govern its proceedings through the adoption of by-laws, which the Trust Advisory Board may adopt by majority vote. No provision of such by-laws shall supersede any express provision of the Plan or of this Trust Agreement. Without limiting the generality of the foregoing, the Trust Advisory Board by-laws shall provide that all authorizations, directions and advice rendered by the Trust Advisory Board to the Trustee at any time pursuant to the Plan and this Trust Agreement shall be by majority vote of the Trust Advisory Board members voting in any case and that at least two (2) members of the Trust Advisory Board shall constitute a necessary quorum required to vote on any matter to be voted upon by the Trust Advisory Board. SECTION 8.4 Litigation of Trust Claims. The Trust Advisory Board may, by majority vote, authorize the Trustee to file judicial or administrative proceedings on Trust Claims as proposed by the Trustee or any member of the Trust Advisory Board. SECTION 8.5 Settlement of Trust Claims. The Trust Advisory Board shall, by majority vote, approve or reject all settlements of Trust Claims which the Trustee or any member of the Trust Advisory Board may propose, but (i) no member of the Trust 19 Advisory Board may cast a vote with respect to any Trust Claim to which it is a party, and (ii) the Trustee may seek Bankruptcy Court approval of a settlement of a Trust Claim if the Trust Advisory Board fails to act on a proposed settlement of the Trust Claim within thirty (30) days of receiving notice of the proposed settlement by the Trustee or as otherwise deemed necessary or advisable by the Trustee. SECTION 8.6 Advice and Direction to Trustee. The Trust Advisory Board shall provide advice, instruction and direction on matters arising in the administration and in the disposition and distribution of Trust Assets, and in the pursuit of Trust Claims, as requested by the Trustee, or as otherwise specifically provided herein. SECTION 8.7 Investments. The Trust Advisory Board may, by majority vote, authorize the Trustee to invest the corpus of the Trust in prudent investments other than those described in section 345 of the Bankruptcy Code. SECTION 8.8 Removal of Trustee; Removal of Trust Advisory Board Member. (a) The Trust Advisory Board may, by majority vote, remove the Trustee in its discretion. If the requisite approval is not obtained, the Trustee may be removed by the Bankruptcy Court for cause shown on a motion by any member of the Trust Advisory Board. (b) The Trust Advisory Board may, by majority vote, remove any member of the Trust Advisory Board, in its discretion. If the requisite approval is not obtained, any member of the Trust Advisory Board may be removed by the Bankruptcy Court for cause shown on a motion by any member of the Trust Advisory Board or by the Trustee. SECTION 8.9 Appointment of Successor Trustee. In the event of the death (in the case of a Trustee that is a natural person), dissolution (in the case of a Trustee that is not a natural person), resignation, incompetency or removal of the Trustee, the members of the Trust Advisory Board shall, by majority vote, designate a person to serve as successor Trustee. Such appointment shall specify the date when such appointment shall be effective. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Bankruptcy Court and to the retiring Trustee an instrument accepting the appointment and shall additionally file with the Bankruptcy Court an affidavit demonstrating that such Person is disinterested, as defined by Section 101(14) of the Bankruptcy Code, and thereupon the successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee. SECTION 8.10 Expenses. (a) Each member of the Trust Advisory Board shall be entitled to the reimbursement of the member's reasonable and necessary expenses in carrying out his or 20 her duties as a member of the Trust Advisory Board. The reimbursement of expenses of the Trust Advisory Board members shall be paid out of Trust Assets. (b) On or before the last date of each month following the month for which reimbursement is sought, each member of the Trust Advisory Board shall serve upon the Trustee, its counsel and the other members of the Trust Advisory Board a monthly statement of expenses incurred in carrying out the member's duties. The Trustee, its counsel and the other members of the Trust Advisory Board will have ten (10) days from the date such statement is received to review the statement and object to such statement by serving a written objection on the member of the Trust Advisory Board making the request, which objection shall set forth the precise nature of the objection and the amount at issue. At the expiration of the ten (10) day period, the Trustee shall promptly pay out of Trust Assets 100% of the amounts requested, except for the portion of such fees and disbursements to which an objection has been made. The parties shall attempt to consensually resolve objections, if any, to any monthly statement. If the parties are unable to reach a consensual resolution of any such objection, the party which received an objection to its fees may seek payment of such fees by filing a motion with the Bankruptcy Court on proper notice to the Trustee and its counsel. SECTION 8.11 Standard of Care; Exculpation. Neither the Trust Advisory Board nor any of its members, designees, counsel, financial advisors or any duly designated agent or representatives of any such party shall be liable for the act, default or misconduct of any other member of the Trust Advisory Board, nor shall any member be liable for anything other than such member's own gross negligence or willful misconduct. The Trust Advisory Board may, in connection with the performance of its duties, and in its sole and absolute discretion, consult with the Trustee's counsel and any other of the Trustee's Professionals and/or with counsel and other professional advisors directly retained by the Trust Advisory Board, and the Trust Advisory Board shall not be liable for anything done or omitted or suffered to be done in accordance with the advice or opinions of such professionals. If the Trust Advisory Board determines not to consult with counsel, accountants or other professionals, it shall not be deemed to impose any liability on the Trust Advisory Board, or its members and/or designees. SECTION 8.12 Termination of the Trust Advisory Board. Upon the certification by the Trustee that all Trust Assets have been distributed, abandoned or otherwise disposed of, the members of the Trust Advisory Board shall resign their positions, whereon they shall be discharged from further duties and responsibilities. ARTICLE IX COORDINATION WITH REORGANIZED DEBTORS SECTION 9.1 Access to Debtors and Reorganized Debtors. The Debtors and the Reorganized Debtors shall make available to the Trustee reasonable access during normal business hours, on reasonable notice, to personnel and books and records of the Debtors and the Reorganized Debtors (including, without limitation, documents produced by the 21 Debtors to the Securities and Exchange Commission and/or United States Attorney; transcripts of depositions conducted in connection with any subpoenas issued by the Securities and Exchange Commission and/or United States Attorney; and materials gathered and memoranda and outlines generated in connection with preparing for depositions); all in order to enable the Trustee to perform the Trustee's tasks under the Trust Agreement and the Plan; but the Debtors and the Reorganized Debtors will not be required to make expenditures in response to the requests determined by them to be unreasonable. The Debtors and the Reorganized Debtors shall not be entitled to compensation or reimbursement (including reimbursement for professional fees) with respect to fulfilling their obligations as set forth in this section. ARTICLE X RETENTION OF JURISDICTION Pursuant to the Plan and Confirmation Order, except as otherwise set forth in the Plan, in the Confirmation and herein, the Bankruptcy Court shall retain exclusive jurisdiction over: (a) prosecution of or disputes concerning Trust Claims and any motion to compromise or settle such disputes, except that, if it is determined that the Bankruptcy Court does not have jurisdiction with respect to the foregoing, or if the Trustee chooses to pursue any Trust Claim in another court of competent jurisdiction, the Trustee will have authority to bring such action in any other court of competent jurisdiction; (b) disputes arising in connection with the interpretation, implementation or enforcement of the Trust, including without limitation, the reasonableness of a request to the Debtors and/or the Reorganized Debtors by the Trustee for access pursuant to Section 9.1 and/or any expenditure related thereto and any claims against the Trustee or the Trust Advisory Board; (c) motions or objections regarding compensation and reimbursement of expenses made by the Trustee, the members of the Trust Advisory Board or any professionals retained by the Trustee pursuant to Article 7.3 of the Plan and Sections 7.6 and 8.10 of this Trust Agreement, including, without limitation, the ability of the Bankruptcy Court to enter an order to show cause and commence a hearing to examine any issue concerning the fees and expenses of the Trustee and the Trust Advisory Board or any professionals retained by the Trustee; and (d) requests by the Trustee pursuant to Section 7.3(D) of the Plan and 3.2 of this Agreement for additional Funding Contributions, and to issue, at the request of the Trustee, orders pursuant to Bankruptcy Rule 2004 relating to Trust Claims to use in the administration of the Trust. 22 ARTICLE XI TERMINATION Unless the Trustee asserts an insurance claim in writing, or commences an action or a proceeding asserting a Trust Claim within three (3) years from the Effective Date, in which case the Trust will continue until such action or proceeding is concluded, the Trust shall continue for a term terminating on the earlier to occur of (a) the third anniversary of the Effective Date, without prejudice, however, to the rights of the Trust Advisory Board to extend such three (3) year term for an additional finite term, conditioned upon the Trust not then becoming subject to the Exchange Act and subject to the approval of the Bankruptcy Court, and (b) approval by the Bankruptcy Court of termination of the Trust after distribution of all of the Trust Assets. The Trustee shall at all times endeavor to liquidate the Trust Assets expeditiously, and in no event shall the Trustee unduly prolong the duration of the Trust. On termination of this Trust, the Trustee shall advise the Bankruptcy Court in writing of its termination. Notwithstanding the foregoing, after the termination of the Trust, the Trustee shall have the power to exercise all the powers, authorities and discretions herein conferred solely for the purpose of winding up the affairs of the Trust. The Trustee shall retain the books, records and files that shall have been delivered to or created by the Trustee. At the Trustee's discretion, all of such records and documents may be destroyed at any time after two (2) years from the date of the Court Order terminating the Trust. ARTICLE XII MISCELLANEOUS SECTION 12.1 Notices. All notices, requests or other communications required or permitted to be made in accordance with this Trust Agreement shall be in writing and shall be delivered personally or by facsimile transmission or mailed by first class mail or by overnight delivery service: If to the Trustee, at: with copies to: the Trust Advisory Board, at: Kraft Foods Three Lakes Drive Northfield, Illinois 60093 Attn: Sandra L. Schirmang and American Greetings One American Road Cleveland, Ohio 44144-2398 23 Attn: Arthur Tuttle and Procter & Gamble Distributing Co. 8500 Governor's Hill Drive Cincinnati, Ohio 45249 Attn: G. M. Jones with copies to: Otterbourg, Steindler, Houston & Rosen, P.C. 230 Park Avenue New York, New York 10169 Attn.: Glenn B. Rice, Esq. Enid Nagler Stuart, Esq. If to the Debtors or Reorganized Debtors, at: The Penn Traffic Company 1200 State Fair Boulevard Syracuse, New York 13221-4737 Attn: Francis D. Price, Esq. with copies to: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019-6064 Attn.: Kelley A. Cornish, Esq. Notices sent out by facsimile transmission shall be deemed delivered when actually received, and notices sent by first-class mail shall be deemed delivered three (3) Business Days after mailing and notices sent by overnight delivery service shall be deemed delivered the next Business Day after mailing. SECTION 12.2 Effectiveness. This Trust Agreement shall become effective on the Effective Date. SECTION 12.3 Intention of Parties to Establish Trust. This Trust Agreement is intended to create a trust, and the Trust created hereunder shall be governed and construed in all respects as a Trust. SECTION 12.4 Investment Company Act. The Trust is organized as a liquidating entity in the process of liquidation, and therefore should not be considered, and the Trust does not and will not hold itself out as, an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act. 24 SECTION 12.5 Taxation. For United States federal income tax purposes, it is intended that the Trust be classified as a liquidating trust under ss. 301.7701-4 of the Procedure and Administration Regulations and as a grantor trust subject to the provisions of Subchapter J, Subpart E of the Code that is owned by its beneficiaries as grantors. Accordingly, the parties hereto intend that, for United States federal income tax purposes, the Beneficiaries be treated as if they had received a distribution of an undivided interest in the Trust Assets and then contributed such interests to the Trust. SECTION 12.6 Counterparts. This Trust Agreement may be executed in one or more counterparts (via facsimile or otherwise), each of which shall be deemed an original but which together shall constitute but one and the same instrument. SECTION 12.7 Governing Law. This Trust Agreement shall be governed by, construed under and interpreted in accordance with the laws of the State of New York. SECTION 12.8 Headings. Sections, subheadings and other headings used in this Trust Agreement are for convenience only and shall not affect the construction of this Trust Agreement. SECTION 12.9 Interpretative Provisions. (a) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural unless the context otherwise requires. (b) All references to the Debtors, the Reorganized Debtors and the Trustee pursuant to the definitions set forth in the Recitals hereto, or to any other Person herein, shall include their respective successors and assigns. (c) The words "hereof", "herein", "hereunder", "this Trust Agreement" and words of similar import when used in this Trust Agreement shall refer to this Trust Agreement as a whole and not any particular provision of this Trust Agreement and as this Trust Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. (d) The word "including" when used in this Trust Agreement shall mean "including, without limitation". SECTION 12.10 Severability. Any provision of this Trust Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions of this Trust Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable any such provision in any other jurisdiction. SECTION 12.11 Amendments. This Trust Agreement may be amended from time to time by written instrument executed by the Reorganized Debtors and the Trustee, upon authorization by the Trust Advisory Board on majority vote, except that, no such Trust 25 Advisory Board authorization shall be required if the Trustee's counsel advises the Trustee that any such amendment is required to ensure that the Trust will not become subject to the Exchange Act or pursuant to Bankruptcy Court Order. SECTION 12.12 Non-transferability of Beneficial Interests; Interests Beneficial Only; No Voting Rights; Successors. (a) All interests of the Beneficiaries of this Trust shall be uncertificated and non-transferable, except upon the death of a Beneficiary that is a natural Person or by operation of law. (b) The rights to a beneficial interest hereunder shall not entitle any Beneficiary to (i) any title in or to the Trust Assets as such (which title is vested in the Trustee) or to any right to call for a partition or division of Trust Assets or to require an accounting, or (ii) any voting rights with respect to the administration of the Trust and the actions of the Trustee in connection therewith. (c) This Trust Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns hereunder. SECTION 12.13 No Suits by Claimholders. No Claimholder shall have any right by virtue of any provision of this Trust Agreement to institute any action or proceeding in law or in equity against any party other than the Trustee on or under or with respect to the Trust Assets. SECTION 12.14 Irrevocability. The Trust is irrevocable, but is subject to amendment as provided for herein. SECTION 12.15 Trust Continuance. The death, dissolution, resignation, incompetency or removal of the Trustee shall not operate to terminate the Trust created by this Trust Agreement or to revoke any existing agency created under the terms of this Trust Agreement or invalidate any action theretofore taken by the Trustee. In the event of the resignation or removal of the Trustee, the Trustee shall promptly (a) execute and deliver such documents, instruments and other writings as may be requested by the Bankruptcy Court or reasonably requested by the Trust Advisory Board or a successor Trustee to effect the termination of the Trustee's capacity under this Trust Agreement and the conveyance of the Trust Assets then held by the Trustee to the successor, (b) deliver to the Bankruptcy Court or the successor Trustee all documents, instruments, records and other writings related to the Trust as may be in the possession of the Trustee and (c) otherwise assist and cooperate in effecting the assumption of its obligations and functions by such successor Trustee. SECTION 12.16 Enforcement and Administration. The Bankruptcy Court shall enforce and administer the provisions of this Trust Agreement, as set forth in the Plan. [SIGNATURE PAGE FOLLOWS] 26 IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement or caused this Trust Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written. THE PENN TRAFFIC COMPANY THE DEBTOR AFFILIATES AND THE REORGANIZED DEBTORS By: ___________________________ Name: _______________ Title: Chief Executive Officer of The Penn Traffic Company and authorized signatory of each of the other Debtors and of each of the Reorganized Debtors ___________________, AS TRUSTEE Name: Title: Trustee 28 PLAN SCHEDULE 1.33 ------------------ LIST OF DEBTORS' ENTITIES, JURISDICTION OF INCORPORATION AND CASE NUMBER
- ------------------------------------------------------------------------------------------------------------- NAME CASE NUMBER JURISDICTION OF INCORPORATION - ------------------------------------------------------------------------------------------------------------- The Penn Traffic Company 03-22945 (ASH) DELAWARE CORPORATION - ------------------------------------------------------------------------------------------------------------- Dairy Dell, Inc. 03-22947 (ASH) PENNSYLVANIA CORPORATION - ------------------------------------------------------------------------------------------------------------- Penny Curtiss Baking Company, Inc. 03-20312 (ASH) NEW YORK CORPORATION - ------------------------------------------------------------------------------------------------------------- Big M Supermarkets 03-22946 (ASH) NEW YORK CORPORATION - ------------------------------------------------------------------------------------------------------------- Sunrise Properties, Inc. 03-22949 (ASH) PENNSYLVANIA CORPORATION - ------------------------------------------------------------------------------------------------------------- Pennway Express, Inc. 03-22948 (ASH) PENNSYLVANIA CORPORATION - ------------------------------------------------------------------------------------------------------------- Big Bear Distribution Company 03-22950 (ASH) DELAWARE CORPORATION - ------------------------------------------------------------------------------------------------------------- Commander Foods, Inc. 03-22951 (ASH) NEW YORK CORPORATION - ------------------------------------------------------------------------------------------------------------- Abbott Realty Corporation 03-22952 (ASH) VERMONT CORPORATION - ------------------------------------------------------------------------------------------------------------- Bradford Supermarkets, Inc. 03-22955 (ASH) VERMONT CORPORATION - ------------------------------------------------------------------------------------------------------------- P&C Food Markets, Inc. of Vermont 03-22954 (ASH) VERMONT CORPORATION - ------------------------------------------------------------------------------------------------------------- PT Development, LLC 03-22956 (ASH) NEW YORK LIMITED LIABILITY CORPORATION - ------------------------------------------------------------------------------------------------------------- PT Fayetteville/Utica, LLC 03-22957 (ASH) NEW YORK LIMITED LIABILITY CORPORATION - -------------------------------------------------------------------------------------------------------------
PLAN SCHEDULE 1.35 ------------------ PLAN SCHEDULE 1.35 Pursuant to James A. Demme's employment agreement with the Debtors to serve as Chairman of the Board of Directors of Penn Traffic, dated August 2003 (and as subsequently amended) the Demme Success Bonus Distributions are based on the percentage recoveries, in any form on allowed general unsecured claims, including the 11% senior notes and all other general unsecured claims, as follows: (x) for recoveries up to 10%, the Success Bonus will be $250,000.00; and (y) for each additional 1% of recoveries above 10%, the Success Bonus will be increased by an additional $20,000.00. Based on a recovery of 41% on allowed general unsecured claims - the midpoint of the estimated range of recoveries set forth in the First Amended Disclosure Statement dated February 4, 2005 (40-42%) - - the Demme Success Bonus is $870,000 calculated as follows: $250,000 (on first 10% recovery) (31 percentage points above 10%, + $620,000 multiplied by $20,000) ---------- $870,000 PLAN SCHEDULE 1.63 ------------------ PLAN SCHEDULE 1.63 KZCS will be paid a Success Fee as follows: (i) $2.75 million upon entry of an approval order of the Bankruptcy Court; (ii) $1 million when the "aggregate unsecured creditor recovery" ("AUCR," as defined below) exceeds 25%; and (iii) $1.25 million when the AUCR exceeds 30%. AUCR means the 30 day average daily closing trading price of the New Penn Traffic Common Shares, MULTIPLIED BY the 30 day average of the number of New Penn Traffic Common Shares issued and outstanding, DIVIDED BY the 30 day average of the aggregate amount of Allowed Class 3 Claims. Such calculation will be performed after the Effective Date daily beginning on the 120th day after public trading of the New Penn Traffic Common Shares commences, and shall continue through the 485th day thereafter. PLAN SCHEDULE 1.79 ------------------ PLAN SCHEDULE 1.79 PJSC will be paid a Reorganization Fee of $2,250,000.00 LESS the aggregate amount of monthly advisory fees paid to PJSC during the chapter 11 cases as of the Effective Date (at $100,000.00 per month). PLAN SCHEDULE 3.1 -----------------
- ------------------------------------------------------------------------------------------------------------------------------------ THE PENN TRAFFIC COMPANY REJECT LISTING - ------------------------------------------------------------------------------------------------------------------------------------ CONTRACT PARTY NOTICE ADDRESS CONTRACT DESCRIPTION CONTRACT DATE REJECTION DATE - ------------------------------------------------------------------------------------------------------------------------------------ 3606 John Glenn American Color GraphicsDivision Blvd. of Sullivan Graphics Brentwood, TN 37027 Purchasing Agreement 07/01/96 - ------------------------------------------------------------------------------------------------------------------------------------ Ameritech Bill Payment Center PO Box 392, Service Agreement 05/02/03 Saginaw, MI 48663-0003 - ------------------------------------------------------------------------------------------------------------------------------------ Anda Pharmaceuticals - Andrx 2915 Weston Road Pharmacy Supply Agreement 01/01/03 Weston, FL 33331 - ------------------------------------------------------------------------------------------------------------------------------------ AT&T Corp. 7872 Collection Center Drive Managed Internet Service Order 05/12/03 Chicago, IL 60693 Attachment - ------------------------------------------------------------------------------------------------------------------------------------ AT&T Corp. 7872 Collection Center Drive Managed Internet Service T-1 Local 05/06/03 Chicago, IL 60693 Access Promotional Addendum - ------------------------------------------------------------------------------------------------------------------------------------ AT&T Corp. 7872 Collection Center Drive Global Network Services - Service 07/11/01 Chicago, IL 60693 Order Attachment - ------------------------------------------------------------------------------------------------------------------------------------ Barkers Electronics Division of Dept. LA21011 Service Agreement 04/01/93 Talleyr & Broadcasting 3016 Maryland Avenue Suite 100 State College, PA 16801 - ------------------------------------------------------------------------------------------------------------------------------------ Bindley Western Drug Company PO Box Pharmacy Agreement 08/24/00 7777-W9470 Philadelphia, PA 17175-6470 - ------------------------------------------------------------------------------------------------------------------------------------ 2051 Mckenzie Drive Bindley Western Drug Company Philadelphia, PA 17175-6470 Pharmacy Agreement 02/01/02 - ------------------------------------------------------------------------------------------------------------------------------------ 150 East Broad Street Suite 1055 Brinks Incorporated Chicago, IL 60675 Armored Car Services Agreement 09/01/02 - ------------------------------------------------------------------------------------------------------------------------------------ 101 Old Cove Road Suite 100 Burns International Security Chicago, IL 60693 Guard Service Agreement 02/05/99 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 182537 Columbus Dispatch Columbus, OH 43218-2537 Advertising Agreement 01/18/02 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 3085 Columbus Dispatch Columbus, OH 43218-2537 Advertising Agreement 01/18/02 - ------------------------------------------------------------------------------------------------------------------------------------ 1 Moonlight Drive Creekside Mushroom Services, Inc. Worthington PA 16262-9730 Purchasing Agreement 01/01/01 - ------------------------------------------------------------------------------------------------------------------------------------ Custom Technical 976 Old Henderson Road Service Corporation Byesville, OH 43723 Service Agreement 12/06/02 - ------------------------------------------------------------------------------------------------------------------------------------ 3600 N River Road Dean FoodsPaul Bilzor Franklin Park, IL 60131 Purchasing agreement 01/01/98 - ------------------------------------------------------------------------------------------------------------------------------------ 5251 DTC Parkway, Suite 1400, Digiterra Greenwood Village, Colorado, 80111 Service Agreement 01/11/02 - ------------------------------------------------------------------------------------------------------------------------------------ Dole Fresh Vegatables Lock Box 70042 Chicago, IL 60693 Purchasing Agreement 01/01/00 - ------------------------------------------------------------------------------------------------------------------------------------ 1140 Bloomfield Avenue DW28 Wapakoneta, LLCDon Wong Toledo, OH 43613 Lease - Store #1214 (Wapakoneta, OH) 04/17/86 - ------------------------------------------------------------------------------------------------------------------------------------ 147 Maysville Pike, Suite 209, West E.N. Entertainment, Inc. Caldwell, NJ 07006 Service Agreement 12/13/01 - ------------------------------------------------------------------------------------------------------------------------------------ Earthlink Network, Inc. PO Box 530530 Atlanta, GA 30353-0530 Service Agreement 07/18/01 - ------------------------------------------------------------------------------------------------------------------------------------ First Choice Personnel PO Box 3622 Dept 467 Interm Staffing Agreement 07/01/00 Buffalo , NY 14267-8000 - ------------------------------------------------------------------------------------------------------------------------------------ 395 Ghent Road First Energy Project Dev. Akron, OH 44309-3622 Service Agreement 03/20/01 - ------------------------------------------------------------------------------------------------------------------------------------ 522 Madison Avenue First Energy Solutions (FES) Akron, OH 44333 Energy Service Agreement 01/10/05 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 2388 Suite 600 FlavorRx Bethesda, MD 20814 Service Agreement 12/19/00 - ------------------------------------------------------------------------------------------------------------------------------------ 1975 Noble Road Nela Park 4452 General Electric Cleveland, OH 44112 Rebate Agreement 10/01/02 - ------------------------------------------------------------------------------------------------------------------------------------ George Howe 6501C Basile Road Ross Empire Skate Brokers East Syracuse, NY 13057 Rebate Agreement 01/20/00 - ------------------------------------------------------------------------------------------------------------------------------------ Grant/Riverside Methodist Hospitals Corporation Ohio Health 2315 Sanders Road Service Agreement 03/07/01 Behavioral Health Columbus, OH 43214 - ------------------------------------------------------------------------------------------------------------------------------------ Zane Plaza H. Meyer Dairy Mike Meyer East Syracuse, NY 13057 Purchasing Agreement 01/01/98 - ------------------------------------------------------------------------------------------------------------------------------------ Hormel Foods Corporation 1 Hormel Place Purchasing Agreement 07/11/02 Austin, MN 55912-3680 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 7247-0276 Maintenance Agreement Amendment 01/01/04 IBM Philadelphia, PA 19170 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 7247-0276 IBM Philadelphia, PA 19170 Maintenance Agreement 12/15/00 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 549 IBM Philadelphia, PA 19170 Service Agreement 01/01/04 - ------------------------------------------------------------------------------------------------------------------------------------ 777 Columbus Avenue ICT Collect-A- Check Reynoldsburg, OH 43068 Service Agreement 01/05/01 - ------------------------------------------------------------------------------------------------------------------------------------ Imaging Resources Center 1810 Summit Commerce Park Service Agreement 09/09/02 Suite 1008-F Lebanon, OH 45036 - ------------------------------------------------------------------------------------------------------------------------------------ Independence Medical 1820 Northwest Blvd. Lease - Equipment 01/01/03 Cleveland, OH 44087 - ------------------------------------------------------------------------------------------------------------------------------------ 1770 Indian Trail Road Suite C Innovative Treasury Systems Daphne, AL 36526 Confidentiality Agreement 12/20/01 - ------------------------------------------------------------------------------------------------------------------------------------ 3637 State Route 5 Station B Interstate Brands Corp. Columbus , OH 43201-0369 Purchasing Agreement 07/08/02 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 2244 Joseph V. Fisher Mashpee, MA 02649 Employment Contract 10/30/98 - ------------------------------------------------------------------------------------------------------------------------------------ 148 Parmelee Drive Libman Company Chicago, IL 60678-5467 Purchasing Agreement 12/22/98 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 360835 Lifetime/Hoan Hudson, OH 44236 Purchasing Agreement 05/16/03 - ------------------------------------------------------------------------------------------------------------------------------------ 261 West Johnston Road Loomis Fargo Pittsburgh, PA 15251 Armored Car Services Agreement 12/10/98 - ------------------------------------------------------------------------------------------------------------------------------------ 412 Wasta Avenue Martin A. Fox Westport, CT 06880 Employment Contract 01/31/00 - ------------------------------------------------------------------------------------------------------------------------------------ 191 West Nationwide Blvd Next Generation Nutraceuticals Wayneville, OH 45068 Service Agreement 04/23/03 - ------------------------------------------------------------------------------------------------------------------------------------ 300 Erie Boulevard Niagara Mohawk West Syracuse, NY 13252 Pole Attachment Agreement 05/06/93 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 1283 Pae Tec Communications Inc. Buffalo, NY 14240-1283 Service Agreement 01/01/03 - ------------------------------------------------------------------------------------------------------------------------------------ Pitney Bowes 2225 American Drive Service Agreement -Rye Office 11/19/01 Neenah, WI 54956-1005 - ------------------------------------------------------------------------------------------------------------------------------------ Po Box 5103 Road Runner/Timer Warner Cable Buffalo, NY 14240-5103 Service Agreement 10/10/00 - ------------------------------------------------------------------------------------------------------------------------------------ Safeway 2018 Eagle Brooke Parkway Service Agreement N/A Wall, NJ 07719 - ------------------------------------------------------------------------------------------------------------------------------------ 225 W Randolph 11th Floor SBC Ameritech Chicago, IL 60602 Service Agreement 05/02/03 - ------------------------------------------------------------------------------------------------------------------------------------ 404 Hamilton Street SBC Global Services Inc. Chicago, IL 60606 Service Agreement 05/02/03 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 279 808 South West 12th St. Signature Brands / Cakemate Ocala FL 33478 Purchasing Agreement 01/01/99 - ------------------------------------------------------------------------------------------------------------------------------------ Sun Life Assurance Co. of Canada 1119 Regency Drive Suite 150 Shari Lake Columbus, OH 43240 Service Agreement 10/01/99 - ------------------------------------------------------------------------------------------------------------------------------------ Sungard Recovery Services Inc PO Box 91233 Chicago, IL 60693 Service Agreement 06/28/94 - ------------------------------------------------------------------------------------------------------------------------------------ Sungard Recovery Services Inc PO Box 91233 Chicago, IL 60693 Service Agreement Amendment 05/01/03 - ------------------------------------------------------------------------------------------------------------------------------------ The Harvard Drug Group 31778 Enterprise Drive PO Box 51640 Medicare Backend Service Agreement 09/27/02 Livonia, MI 48150 - ------------------------------------------------------------------------------------------------------------------------------------ Tonawanda Tank Transportation 1140 Military Road Service Agreement 05/01/03 PO Box H Buffalo, NY 14217 - ------------------------------------------------------------------------------------------------------------------------------------ 207 Semoran Commerce Place Try Foods International Apopka, FL 32703 Service Agreement 12/01/01 - ------------------------------------------------------------------------------------------------------------------------------------ PO Box 8500-4060 Unisource Pittsburgh, PA 15251-6829 Purchasing Agreement 12/10/98 - ------------------------------------------------------------------------------------------------------------------------------------ Salina Meadows III Xerox Corp Attn: Jean Oliver, North Syracuse, NY 13212 Lease - Equipment - ser #N8N-078115 08/01/01 - ------------------------------------------------------------------------------------------------------------------------------------ Salina Meadows III Attn: Jean Oliver, Xerox Corp North Syracuse, NY 13212 Lease - Equipment - ser #N8N-078132 08/01/01 - ------------------------------------------------------------------------------------------------------------------------------------ Salina Meadows III Attn: Jean Oliver, Xerox Corp North Syracuse, NY 13212 Lease - Equipment - ser #NL2-001502 10/01/00 - ------------------------------------------------------------------------------------------------------------------------------------
PLAN SCHEDULE 3.2 -----------------
- -------------------------------------------------------------------------------------------------------------------------------- THE PENN TRAFFIC COMPANY ASSUME LISTING CONTRACT PARTY NOTICE ADDRESS CONTRACT DESCRIPTION CONTRACT DATE CURE AMOUNT - -------------------------------------------------------------------------------------------------------------------------------- 1085 North Warren Partners, 1350 Avenue of the Americas, Lease - Quality Store #6619 07/07/89 4,651.47 L.P. c/o Kaplan Suite 3100 (North Warren, PA) Realty Group New York, NY 10019 - -------------------------------------------------------------------------------------------------------------------------------- 2468 Group, Inc. 210 Ellicott Square Lease - P&C Store #3021 c/o Paul Moretta Buffalo, NY 14203 (Syracuse, NY) 03/01/88 20,459.02 - -------------------------------------------------------------------------------------------------------------------------------- 2468 Group,Inc. 210 Ellicott Square Lease Franchise - Big M #726 c/o Paul Moretta Buffalo, NY 14203 (Brockport, NY) 01/01/85 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 4D Pharmacy Management 380 North Old Woodward Systems Suite 112 Pharmacy Provider Agreement 01/01/00 0.00 Birmingham, MI 48009 - -------------------------------------------------------------------------------------------------------------------------------- 81 & 13 Cortland Associates 6495 Transit Road Lease - P&C Store #3095 06/01/01 2,939.96 c/o Joe Cipolla Bowmansville, NY 14026 (Cortland, NY) - -------------------------------------------------------------------------------------------------------------------------------- PO Box 229 Route 113 A. Cook Associates Inc. Thetford Center, VT 05075 Software License Agreement 01/10/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Abbott Laboratories, 200 Abbott Park Road Incorporated Department 303 Pharmaceutical Rebate Agreement 01/01/03 0.00 Building AP-30 Abbott Park, IL 60064-6148 - -------------------------------------------------------------------------------------------------------------------------------- Abbott's Supermarket, Inc. 4915 Groiler Road Franchise Store Agreement - 12/15/87 0.00 d/b/a Abbott's Big M Syracuse, NY 13215 Big M #724 (Syracuse, NY) - -------------------------------------------------------------------------------------------------------------------------------- Acadia Realty LP 1311 Mamaroneck Avenue Lease - P&C Store #3194 c/o Tim Bruce White Plains, NY 10605 (Towanda, PA) 10/01/94 16,067.65 - -------------------------------------------------------------------------------------------------------------------------------- ACS State State Healthcare, 9040 Rosewell Road LLC Atlanta, GA 30350 Member Pharmacy Agreement 06/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Adirondack Regional Federal Credit Union 280 Park Street Tupper Lake, NY 12986 ATM Contract 04/03/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Advanced Auto Parts PO Box 2710 Sublease - Bilo Store #9210 Roanoke, VA 24001 (Johnstown, PA) 09/11/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Advanced PCS 9501 East Shea Boulevard Scottsdale, AZ 85260 Pharmacy Provider Agreement 01/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Aetna US Healthcare PO Box 70944 Prescription Claims Chicago, IL 60673-0944 Processing Agreement 06/15/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Agelity, Inc. 555 Broad Hollow Road Suite 402 Participating Pharmacy Agreement 04/22/02 437.00 Melville, NY 11747 - -------------------------------------------------------------------------------------------------------------------------------- Alan J. Finlay 15 Public Square, Suite 212 Lease - Bilo East Store #4326 02/13/86 0.00 Bicentennial Building Wilkes-Barre, PA 18701-1798 (Dallas, PA) - -------------------------------------------------------------------------------------------------------------------------------- Allfirst Trust Co. of Pennsylvania, NA 213 Market Street PO Box 2961 Lease - Store Bilo #9275 02/01/02 0.00 Ron Howard, Esq Harrisburg, PA 17101-2127 (Canton, PA) - -------------------------------------------------------------------------------------------------------------------------------- Alliance PO Box 7129 London, KY 40742 Participating Pharmacy Agreement 01/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Alliance 17 Peach Street, Suite 244 Erie, PA 16512 Participating Pharmacy Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Alliance Bank, N.A. 160 Main Street Oneida, NY 13421 Liscense Agreement 07/27/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Allwin Data Services One West Pack Square Suite 1400 Participating Pharmacy Agreement 03/28/03 2,281.30 Asheville, NC 28801 - -------------------------------------------------------------------------------------------------------------------------------- American Enterprise Life PO Box 534 Insurance Company Minneapolis, MN 55440-0534 Blairsville Mortgage 04/22/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- American Enterprise Life Insurance Company PO Box 534 Minneapolis, MN 55440-0534 Clarion Mortgage 04/22/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- American Equity Associates 4053 Maple Road, Suite 2000 Lease - Quality Store #6643 LP c/o Robert Willard Amherst, NY 14226 (Lockport, NY) 02/01/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Amerihealth Mercy 200 Stevens Drive Health Plan Philadelphia, PA 19113 Pharmacy Services Agreement 01/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ameriscript Prescription 4301 Darrow Road BenefitManagement Company Stow, OH 44224 Pharmacy Provider Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ameriserv Financial Bank PO Box 430 Sublease - Bilo Store #9210 Attn: Tony Gojmerac Johnstown, PA 15907-0430 (Johnstown, PA) 01/01/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Amored Motor Services of 101 Victor Heights Parkway America, Inc. Victor, NY 14564 Armored Car Services Agreement 02/01/01 55,414.30 - -------------------------------------------------------------------------------------------------------------------------------- Andrew & Lynette Murphy 5513 State Route 36 Franchise Store Agreement - Canisteo, NY 14823 Big M #804 (Canisteo, NY) 08/01/71 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Anis I Obeid MD One Thornwood Lane Lease - P&C Store #3105 Fayetteville, NY 13066 (W. Carthage, NY) 02/06/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Anthem Presciption 8990 Duke Blvd Management, LLC Mason, OH 45040 Participating Pharmacy Agreement 01/01/02 362.20 - -------------------------------------------------------------------------------------------------------------------------------- Anthony C. Previte PO 398 Spangler, PA 15775 Lease - Bilo Store #9229(Spangler, PA) 02/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Anthony Creme 207 West Wynthrop Road Franchise Store Agreement - Big M # 09/10/71 0.00 Solvay, NY 13209 810 ( Weedsport, NY ) - -------------------------------------------------------------------------------------------------------------------------------- Argus Health Systems, Inc. 1300 Washington St Kansas City, MO Angus Network Agreement 01/01/02 0.00 64105-1433 - -------------------------------------------------------------------------------------------------------------------------------- 1661 North Raymond Ave Ascend Software Suite 107 Software License & Incorporated Anaheim, CA 92801-1168 Maintenance Agreement 09/15/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ascend Software 500 South Kraemer Blvd. Software License & Maintenance Incorporated Suite 350 Brea, CA 92821-6797 Agreement Addendum 07/31/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 60000 File #92127 Ascential Software, Inc. San Francisco, CA 91460-2127 Software License Agreement 01/14/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Aspen Realty 71 Pearl Street Lease - Bilo Store #9277 c/o Thomas Maynard Wellsboro, PA 16901 (Wellsboro, PA) 11/01/03 4,000.50 - -------------------------------------------------------------------------------------------------------------------------------- At Systems Atlantic, Inc PO Box 15009 Los Angeles, CA 90015-5009 Armored Car Services Agreement 11/01/94 905.11 - -------------------------------------------------------------------------------------------------------------------------------- Avonelle, Inc. Rt 338 PO Box 329 Associate Store Agreement - d/b/a Tom's Riverside Knox, PA 16232 Bilo #775 (Knox, PA) 05/16/77 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Avonelle, Inc. 108 Main Street Associate Store Agreement - d/b/a Tom's Riverside Rimersburg, PA 16248 Bilo #789 (Rimersburg, PA) 09/30/88 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Bakery, Confectionary, 115 N Main Street Collective Bargaining Agreement Tobacco Workers North Syracuse, NY 13212 - Penny Curtiss Frozen 01/12/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Bakery, Confectionary, 115 N Main Street Collective Bargaining Agreement Tobacco Workers North Syracuse, NY 13212 - Penny Curtiss Fresh 07/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 50 North Main Street Sublease - Bilo Store #9003 Bamboo Garden Inc. Dubois, PA 15801 (Dubois, PA) 06/12/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Baris Enterprises, Inc. 4435 Red Rock Road Associate Store Agreement - d/b/a Benton Riverside Benton, PA 17814 Bilo #739 (Benton, PA) 01/31/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 9778 Creek Road Baskin Livestock Batavia, NY 14020 Scrap Removal Contract 03/28/00 1,984.56 - -------------------------------------------------------------------------------------------------------------------------------- Bell Atlantic 300 East Washington Street Telephone Pole Rental Agreement 11/23/92 0.00 6th Floor Syracuse, NY 13202 - -------------------------------------------------------------------------------------------------------------------------------- Benchmark Union Ferry Associate 4053 Maple Road Lease - Quality Store #6629 c/o Robert Willard Amherst, NY 14226 (Williamsville, NY) 01/05/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Benderson Development Company 570 Delaware Avenue Lease - Quality Store #6661 c/o Lisa Kadish Buffalo, NY 14202 (Jamestown, NY) 10/22/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Benderson Monroe Associates c/o Benderson PO Box 660 Lease - P&C Store Development Company Buffalo, NY 14201-0660 #3077 (Camillus, NY) 01/01/84 506.51 - -------------------------------------------------------------------------------------------------------------------------------- Berkshire Armored Car Services, Inc. PO Box 62 Pittsfield, MA 01202 Armored Car Services Agreement 08/01/00 1,371.66 - -------------------------------------------------------------------------------------------------------------------------------- Beshara Property Management 770 W. Goodale Blvd. P M B 396 Lease - Bilo Store #9219 Youngstown, OH 44512 (Titusville, PA) 09/21/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Bion R. Warren Route 49 Franchise Store Agreement- Big M 01/26/99 0.00 d/b/a Westfield Big M Westfield, NY 16950 #891 (Westfield, NY) - -------------------------------------------------------------------------------------------------------------------------------- PO Box 655 Associated Store Agreement Blairco Realty, Inc. Duncansville, PA 16635 - Bilo Store# 724 (Duncansville, PA) 02/26/70 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross & Blue Sheild of Eastern 70 North Main Street Participating Pharmacy Agreement 01/01/05 0.00 Pennsylvania, Inc. Wilkes-Barre, PA 15711 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross & Blue Shield 1800 Center Street of Pennsylvania, Inc Camp Hill, PA 17089-0089 Participating Pharmacy Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross & Blue Shield of Pennsylvania, 1901 Main Street Inc - Health Now Buffalo, NY 14208 Participating Pharmacy Agreement 02/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross & Blue Fifth Avenue Place Shield of Western 120 Fifth Avenue Pennsylvania, Inc. Pittsburgh, PA 15222-3099 Participating Pharmacy Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross Blue Sheild 450 Riverchase Prkwy East of Alabama, Inc. Birmingham, Alabama 35298-0001 Participating Pharmacy Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross Blue Sheild PO Box 1271 of Regence, Inc. Portland, OR 97207 Participating Pharmacy Agreement 07/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Blue Cross/Blue Shield PO Box 4752 ExcellusHealth Plan - Group Syracuse, NY 13221-4752 Participating Pharmacy Agreement 04/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Boonville Big M, Inc. 261 Utica Blvd Franchise Store Agreement - Booneville, NY 13309 Big M #820 (Boonville, NY) 10/01/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Border Oil & Gas Co, Inc PO Box 130 Lease - Quality Store #6657 c/o Florence Stout Allegheny, NY 14706 (Ellicotville, NY) 12/01/04 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 822 Boylston Street, Suite 301 Lease - Penny Curtis Bakery Bresky Associates Chestnut Hill, MA 2467 (Syracuse, NY) 12/15/88 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Brink's U.S., a Division 79 Rosalia Street of Brink's, Inc. Buffalo, NY 14216 Armored Car Services - Renewal 09/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Brink's U.S., a Division 79 Rosalia Street of Brink's, Inc. Buffalo, NY 14216 Armored Car Services Agreement 10/21/98 733.17 - -------------------------------------------------------------------------------------------------------------------------------- 58-68 Exchange Street BSB Bank Binghamton, NY 13902 ATM Contract 04/01/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 155 Technology Parkway Suite 100 Business Software, Inc. Norcross, GA 30092 Software Support Agreement 06/13/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 360 Interstate North Parkway Suite 400 Buypass Corporation Atlanta, GA 30339 Master Agreement 11/02/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Buypass 360 Interstate North Parkway Corporation Suite 400 Concord EFS National Bank Atlanta, GA 30339 Amendment to BuyPass Master Agreement 04/14/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Buypass Corporation 360 Interstate Norht Parkway Electronic Payment Processing Concord EFS National Bank Suite 400 Atlanta, GA 30339 Agreement with an EBT Service Rider 11/02/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Capital Returns, Inc. 4066 N. Port Washington Rd. Outdated Drug Return Company 01/01/03 0.00 Milwaukee, WI 53212 - -------------------------------------------------------------------------------------------------------------------------------- Cardinal Health 7000 Cardinal Place Dublin, Ohio 43017 Pharmacy Supply Agreement 08/28/00 143,494.78 - -------------------------------------------------------------------------------------------------------------------------------- Caremark, Inc. 2211 Sanders Road Northbrook, IL 60062 Participating Pharmacy Agreement 05/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 5555 Glendon Court PO Box 182726 Careworks Dublin, Ohio 43016 Participating Pharmacy Agreement 05/29/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Carmen & Rhonda Licari 45 Averill Street Street Franchise Store Agreement - 11/01/61 0.00 Johnsville, NY 13452 Big M # 890 (Dolgeville, NY) - -------------------------------------------------------------------------------------------------------------------------------- Carolina Coupon Coupon 2601 Pilgrim Court Prism Services Processing 01/01/03 25,858.87 Clearing, Inc. Winston-Salem, NC 27106 Agreement - Addendum - -------------------------------------------------------------------------------------------------------------------------------- Carolina Coupon Coupon 2601 Pilgrim Court Reconciliation of RX Claims - 05/04/01 0.00 Clearing, Inc. Winston-Salem, NC 27106 PRISM - Master Contract - -------------------------------------------------------------------------------------------------------------------------------- 300 Pearl Street Suite 700 Cartel Bank Buffalo, NY 14203 ATM Contract 09/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2273 Research Blvd Catalyst Rx/Healthextras Rockville, MD 20850 Participating Pharmacy Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- CCSD Federal Credit Union PO Box 2087 Lease - P&C Store #3171 c/o Robert Groff Sr. Elmira Heights, NY 14903 (Penn Yan, NY) 06/09/93 0.00 Acct.# 760009 - -------------------------------------------------------------------------------------------------------------------------------- Center for Medicare and Medicaid d/b/a Ameristar PO Box 34490 EDI Enrollment Agreement 01/01/05 0.00 Federal Services Louisville, KY 40232-4490 - -------------------------------------------------------------------------------------------------------------------------------- Centurion Properties, Inc. PO Box 959 Lease - P&C Store #3211 c/o Andrew Cunningham Hanover, NH 3755 (Bradford, VT) 03/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Chain Drug Store 421 King Street Suite 301 Participation Agreement 01/01/01 0.00 Alexandria, VA 22314 - -------------------------------------------------------------------------------------------------------------------------------- Charan Industries 370 Old Country Road Lease - P&C Store #3047 08/01/92 0.00 Inc Garden City, NY (Seneca Falls, NY) Garden City, NY c/o Robert Mcderrmott 11530 - -------------------------------------------------------------------------------------------------------------------------------- 4780 Hinckley Industrial Park Charter One Bank Cleveland, OH 44109 ATM Contract 10/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Chess, Inc. 620 Railroad Street PO Box H Lease - Equipment Fishers, NY 14453 (Blood Pressure Machines) 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 6232 North Pulaski Road Chicago-Soft, Ltd. Suite 402 Software License Agreement 09/30/96 0.00 Chicago, IL 60646-5131 - -------------------------------------------------------------------------------------------------------------------------------- Circle Road Plaza, LLC Longley Jones 1010 James Street Lease - P&C Store #3025 Management Corp. Syracuse, NY 13203 (Cicero, NY) 01/01/85 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 91232 Cisco Systems, Inc. Chicago, IL 60693-1232 Mutual Non Disclosure Agreement 01/09/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital 50 Lakefront Blvd Suite 130 Lease - Vehicle (25 dane trailers) 07/01/01 0.00 Buffalo, NY 14202-4388 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital 50 Lakefront Blvd Suite 130 Commercial Leasing Buffalo, NY 14202-4388 Lease - Vehicle 03/30/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital Fleet PO Box 844457 Dallas, TX 75284-4457 Lease - Vehicle (25 -Trailers) 07/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital Fleet PO Box 844457 Dallas, TX 75284-4457 Lease - Vehicle (monthly rental 3531) 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital Fleet PO Box 844457 Dallas, TX 75284-4457 Lease - Vehicle (38 Trailers) 07/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital Fleet PO Box 844457 Dallas, TX 75284-4457 Lease - Vehicle (9915117) 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital Fleet PO Box 844457 Lease - Vehicle Dallas, TX 75284-4457 (Dodge and Ford Vans - 3575) 1,271.17 - -------------------------------------------------------------------------------------------------------------------------------- Citicapital Fleet PO Box 844457 Lease - Vehicle Dallas, TX 75284-4457 (vehicle # 189, 149 - 6552) 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Clayton Food Market, Inc. State Street Franchise Store Agreement - d/b/a Clayton Big M Clayton, NY 13624 Big M #719 (Clayton, NY) 09/30/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Cloverleaf Foods, Inc. 339 Walnut Street Franchise Store Agreement - Bilo #764 d/b/a Ideal Markets Johnstown, PA 15901 (Johnstown, PA ) 02/24/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Cloverleaf Foods, Inc. 346 North Sheridan Street Franchise Store Agreement - d/b/a Ideal Markets Johnstown, PA 15906 Bilo M #765 (Johnstown, PA) 02/24/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Colliers Turley Martin 77 West Port Plaza, Suite 1 Sublease - P&C Store #3068 Tucker Attn: H&R Block St. Louis, MO 63146 (Canastota, NY) 11/11/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Community Bank 151 Main Street Lease - P&C Store #3171 Account #144214 Penn Yan, NY 14527 ( Penn Yan, NY) 06/09/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Communtiy Development 1885 Lyndon Blvd Lease - Quality Store #6575 Association Falconer, NY 14733 (Jamestown, NY) 07/01/04 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Computer Associates PO Box 360355 Intl. Inc. Pittsburgh, PA 15251-6355 Enterprise Licensing Agreement 03/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Computer Associates PO Box 360355 Intl. Inc. Pittsburgh, PA 15251-6355 Enterprise Licensing Agreement 03/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Constance Impert #0212801686 Fernado Road Lease - P&C Store #3171 c/o Bank of America Glendale, CA 91204 (Penn Yan, NY) 06/09/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 16740 Birkdale Commons Pkwy Lease - P&C Store #3038 Cooperstown Commons Assoc. Huntersville NC 28078 (Cooperstown, NY) 09/30/92 31,537.43 - -------------------------------------------------------------------------------------------------------------------------------- Various Agreements relating to the Reciprocal Easement Agreement COR Route 5 Company, LLC 7330 Eastman Road Governing Certain Real Property at 08/15/72 0.00 Syracuse, NY 13021 the Fayetteville Mall in Attn Legal Department Fayetteville, New York - -------------------------------------------------------------------------------------------------------------------------------- Various Agreements relating to the Reciprocal Easement Agreement 7330 Eastman Road Governing Certain Real Property at COR North Burdick Syracuse, NY 13021 the Fayetteville Mall in Street Company, LLC Attn Legal Department Fayetteville, New York 08/15/72 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Cornell Federal 1030 Craft Road Credit Union Ithaca, NY 14850 ATM Contract 12/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Cortland Savings / 1 North Main Street First Niagara Cortland, NY 13045 ATM Contract 08/01/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 643 Maxwell Drive Lease - Quality Store #6626 Cory J. Tarr Titusville, PA 16354 (Kane, PA) 05/28/81 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 643 Maxwell Drive Lease - Quality Store #6605 Cory J. Tarr Titusville, PA 16354 (Corry PA) 06/25/73 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 643 Maxwell Drive Lease - Quality Store #6610 Cory J. Tarr Titusville, PA 16354 (Union City, PA) 09/22/72 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Court Street Market, Seneca Street Franchise Store Agreement Inc. Weedsport, NY 13166 - Big M #810 04/09/90 0.00 d/b/a Weedsport Big M (Weedsport, NY) - -------------------------------------------------------------------------------------------------------------------------------- 23775 Blystone Road PO Box 86 Cambridge Lease - Quality Store #6683 Covenant Temple Association Springs, PA 16403 (Cambridge Springs, PA) 09/01/04 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Cross Food Market, Inc. d/b/a Cayuga And Green Street Franchise Store Agreement - Union Springs Big M Union Springs, NY 13160 Big M #737 (Union Springs, NY) 11/05/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 116628 License Agreement - State Fair Blvd. CSX Transportation Atlanta, GA 30368-6628 Warehouse (Geddes, NY) 07/01/75 0.00 - -------------------------------------------------------------------------------------------------------------------------------- CVS #1594-1 Attn: Occupanry Expense 1 CVS Drive Sublease - Bilo East Store #4344 Department Woonsocket, RI 2895 (Dallas, PA) 09/01/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- CVS # 5016-01 Attn: Occupanry Expense 1 CVS Drive Sublease - P&C Store #3138 Department Woonsocket, RI 2895 (Watkins Glenn, NY) 01/12/76 0.00 - -------------------------------------------------------------------------------------------------------------------------------- CWD Foods, 28 Maple Ave Franchise Store Agreement - Inc. Bloomfield, NY 14469 Big M #731 (Bloomfield, 11/01/91 0.00 d/b/a Bloomfield Big M NY) - -------------------------------------------------------------------------------------------------------------------------------- Daily's Foods, Inc. Route 12 Franchise Store Agreement - d/b/a Alex Bay Big M Alexandria Bay, NY 13607 Big M #830 (Alexandria Bay, NY) 07/28/74 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 325 University Ave. Lease - P&C Store #3102 Daniel Elstein, MD Syracuse, NY 13210 (Pulaski, NY) 01/04/71 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Data 325 University Ave. Capture Solutions, Inc. Manchester, CT 06040 Maintenance Service Agreement 09/10/02 304.10 - -------------------------------------------------------------------------------------------------------------------------------- David & Audry Frydrych, Road 2 Box 2 Associate Store Agreement - Inc. Harmony, PA 16037 Bilo Store #777 01/01/71 0.00 d/b/a Northgate Bilo (Harmony, PA) - -------------------------------------------------------------------------------------------------------------------------------- David Frydrych And Audrey 3 Northgate Plaza, Unit 32 G. Frydrych d/b/a Northgate Harmony, PA Franchise Store Agreement - 6/03/96 0.00 Plaza Bilo 16037 Bilo #777 (Harmony, PA) - -------------------------------------------------------------------------------------------------------------------------------- Deangelis Family, LP c/o Merrill Lynch 205 South Salina Street Acct# 806-07R67 13202 Syracuse, NY Lease - P&C Store #3079 (Dewitt, NY) 11/01/80 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 802 South Crouse Ave Dellas Bros Enterprises Syracuse, NY 13210 Lease - P&C Store #3117 (Manlius, NY) 01/01/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Demro Realty 210 Greenview Court Associate Lease Agreement - c/o Robert Marcus Indiana, PA 15701 Bilo Store #751(Indiana, PA) 12/23/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Deposit Bank West Long Ave PO Box 607A Sublease - Bilo Store #9231 Attn: Dan Stover Dubois, PA 15801 (Dubois, PA) 09/12/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2245 Enterprise Prkwy East Destination Rx Twinsburg, OH 44087 Pharmacy Services Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Dina Compoli 3400 Canastota Commons Sublease - P&C Store #3068 d/b/a: Designs By Dina Canastota, NY 13032 (Canastota, NY) 12/29/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 17449 Direct Comp Rx Memphis, TN 38187-0449 Pharmacy Participation Agreement 06/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Dolgencorp of New York, Inc. Attn: 100 Mission Ridge Sublease - P&C Store #3089 Anita Durham Goodlettsville, TN 37072 (Owego, NY) 06/25/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 10951 Whiterock Road E*Trade Access, Inc. Rancho Cordova, CA 95670 ATM Contract 03/28/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- E. Max Weiss & 1009 Water Street Lease - Quality Store #6633 John A. McCarney Meadville, PA 16335 (Meadville, PA) 11/15/81 4,650.00 - -------------------------------------------------------------------------------------------------------------------------------- East Hill 95 Brown Road Lease - P&C Store #3107 05/14/00 69,381.04 Plaza 146 Langmuir Lab Ithaca, (Ithaca, NY) c/o Ashley Management NY 14850 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 642171 Maintenance and Service Agreement - Eastman Kodak Pittsburgh, PA 15264-0901 P&C 3141 (Fayetteville, NY) 02/01/02 27,215.04 - -------------------------------------------------------------------------------------------------------------------------------- 250 West Broad Street EBRX, Inc. Columbus, OH 43215 Particpating Pharmacy Agreement 03/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 4689 Eckerd Clearwater, FL 34618 Sublease - P&C Store #3115 (Bath, NY) 09/01/77 863.96 - -------------------------------------------------------------------------------------------------------------------------------- Elbridge Food Market, 9 Mechanic Street Franchise Store Agreement - 11/01/79 0.00 Inc. d/b/a Jordan, NY 13080 Big M #857 (Jordan, NY) Jordan Big M - -------------------------------------------------------------------------------------------------------------------------------- Elbridge Food Market, Inc. d/b/a Elbridge 227 East Main Street Franchise Store Agreement - Big M Elbridge, NY 13060 Big M #765 (Elbridge, NY) 11/29/79 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Erie Grand Limited Partnership c/o 277 Fairfield Road Suite 205 Tony Vito Fairfield, NJ 07004- 1931 Lease - Quality Store #6665(Erie, PA) 01/05/93 4,254.98 - -------------------------------------------------------------------------------------------------------------------------------- College Street PO Box 6 36 Ernest A. Pomerleau Burlington, VT 5402 Lease - P&C Store #3283(Waterbury, VT) 04/01/87 5,862.58 - -------------------------------------------------------------------------------------------------------------------------------- 1601 Chestnut Street, ESIS, Inc. Philadelphia, PA 13221 Third Party Service Agreement 03/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Express Scripts 13900 Riverport Avenue F/K/A Value Rx Maryland Heights, MO 63043 Participating Pharmacy Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 66 Main Street PO Box 262 Lease - Quality Store #6602 Falconer Realty Corporation Falconer, NY 14733 (Falconer, NY) 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 1017 Sublease - Bilo Store #9003 Family Dollar Store, Inc. Charlotte, NC 28201-1017 (Dubois, PA) 06/18/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 1017 Sublease - Bilo Store #9210 Family Dollar Store, Inc. Charlotte, NC 28201-1017 (Johnstown, PA) 04/09/84 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 1017 Sublease - Bilo Store #9290 Family Dollar Store, Inc. Charlotte, NC 28201-1017 (Atoona, PA) 11/13/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 1017 Sublease - P&C Store #3068 Family Dollar Store, Inc. Charlotte, NC 28201-1017 (Canastota, NY) 06/16/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 1017 Sublease - P&C Store #3105 Family Dollar Store, Inc. Charlotte, NC 28201-1017 (West Carthage, NY) 08/23/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 251 North Illinois Street Suite 100 Fifth Third Bank (MPS) Indianapolis, IN 46204 The Bank Card Merchant Agreement 05/16/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Finch Enterprises, Inc. 500 Chapel St., Franchise Agreement Store - Big #738 d/b/a Windsor Big M Windsor, NY 13865 (Windsor, NY) 09/17/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 601 Philadelphia Street ATM Contract -Store #9231 First Commonwealth Indiana, PA 15701 (Dubois, PA) 06/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Furnal Family Properties, LLC c/o Richard 138 South Avenue Furnal Hilton, NY 14468 Lease - Big M Store # 835 (Hilton, NY) 03/06/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 215 West Church Rd G&A Group, Inc. King of Prussia, PA 19406 Lease - P&C Store #3112 (Newark, NY) 07/01/93 22,975.87 - -------------------------------------------------------------------------------------------------------------------------------- 156 Peachtree East Shopping Center PMB 111 Lease - Quality Store #6622 Gail Quint Peachtree City, GA 30269 (Silver Creek, NY) 11/01/02 769.96 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 827511 Geisinger Health Plan Philadelphia , PA 19182-7511 BiLo Health Carrier 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 6293 Sahrles Hill Road Gerald C. Perry Dansville, NY 14437 Lease - P&C Store #3115 (Bath NY) 06/09/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Gibraltar Management 150 White Plains Rd Co., Inc. Tarrytown, NY 10591 Lease - P&C Store #3109 (Lowville, NY) 01/16/73 43,493.27 - -------------------------------------------------------------------------------------------------------------------------------- 150 White Plains Road, Gibraltar Management Suite 4000 Lease - P&C Store #3154 Co., Inc. Tarrytown, NY 10591 (Plattsburg, NY) 08/03/99 13,474.65 - -------------------------------------------------------------------------------------------------------------------------------- Glenwood Co. of Macedon c/o 16740 Birkdale Commons Pkwy, Mike Schutrum Huntersville, NC 28078 Lease - P&C Store #3126 (Macedon, NY) 11/01/92 5,928.68 - -------------------------------------------------------------------------------------------------------------------------------- Glimcher Group, One Mellon Bank Center, Inc. Suite 2000 Lease - P&C Store #3085 c/o Ronald Yates Pittsburgh, PA 15219 (Horsehead, NY) 10/01/86 22,493.74 - -------------------------------------------------------------------------------------------------------------------------------- Great A&P 135 S. La Salle Dept 6434 Tea Company, Inc. Chicago, IL 60674-6434 Lease - P&C Store #3119 (Ithaca, NY) 01/01/99 2,876.00 - -------------------------------------------------------------------------------------------------------------------------------- 760 Brooks Ave Griffith Oil Co. Rochester, NY 14619 Service Agreement 07/14/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Griffith Oral 123 Westview Drive Sublease - Bilo Store #9210 10/15/04 0.00 Surgery Johnstown, PA 15905 (Johnstown, PA) c/o Dr. Charles Griffith - -------------------------------------------------------------------------------------------------------------------------------- Groff & Hoyt Enterprises, Inc. d/b/a 204 Delaware Street Franchise Store Agreement - Wallton Big M Walton, NY 13856 Big M #736 (Walton, NY) 09/06/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Groff & Impert 25 Hancock Drive c/o Robert A. Groff Horseheads, NY 14845 Lease - P&C Store #3171 (Penn Yan, NY) 4/01/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Groff & Impert 25 Hancock Drive c/o Robert A. Groff Horseheads, NY 14845 Lease - P&C Store #3171 (Penn Yan, NY) 4/01/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Gulvas Enterprises, Rr 1, Box 166P Ltd d/b/a South Fifth Street Associate Store Agreement - Bilo #702 Mike's Riverside Reynoldsville, PA 15851 (Reynoldsville, PA) 01/02/85 0.00 - -------------------------------------------------------------------------------------------------------------------------------- One Marine Midland Center 10th Floor Sublease - Quality Store #6647 H S B C Buffalo, NY 14203 (Tonawanda, NY) 12/24/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 803 Commonwealth Drive Lease - Bilo Store #9216 H.L. Libby Corp. Warrendale, PA 15806 (Philipsburg, PA) 02/17/89 8,964.59 - -------------------------------------------------------------------------------------------------------------------------------- 803 Commonwealth Drive Lease - P&C Store #3106 H.L. Libby Corp. Warrendale, PA 15806 (Baldwinsville, NY) 05/25/70 40,122.53 - -------------------------------------------------------------------------------------------------------------------------------- 803 Commonwealth Drive H.L. Libby Corp. Warrendale, PA 15806 Lease - P&C Store #3172 (Auburn NY) 08/17/89 3,637.87 - -------------------------------------------------------------------------------------------------------------------------------- 1802 North Main Street Ext. Franchise Supply Agreement - Harold Friedman, Inc. Butler, PA 16001 Bilo #241 (Butler PA) 07/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Harold Friedman, 180 Point Plaza Inc. d/b/a Friedman's Shopping Center Franchise Supply Agreement - Butler Bilo Butler, PA 16001 Bilo #240 (Butler, PA) 07/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Harold Friedman, Inc. d/b/a Friedman's 122 West Brady Street Franchise Supply Agreement- Brady Street Butler, PA 16001 Bilo #245 (Butler, PA) 07/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Harold Friedman, Inc. d/b/a Friedman's 210 Greater Butler Mart Franchise Supply Agreement - Bilo Greater Butler Bilo Butler, PA 16001 #242 (Butler, PA) 07/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Harold Friedman, 270 W. Water Street Inc. d/b/a P.O. Box 246 Franchise Supply Agreement- Bilo Friedman's Saxonburg Saxonburg, PA 16056 Store #248 (Saxonburg, PA) 07/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Harold Friedman, Inc. Hummingbird Plaza Franchise Supply Agreement - d/b/aFriedman's Chicora Chicora, PA 16025 Bilo #244 (Chicora, PA) 07/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Headwaters Plaza Inc. c/o 7550 South State Street Franchise Lease Agreement - Big M Linda Noftseir Lowville, NY 13367 - 1533 Store #820 (Boonville, NY) 01/22/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2273 Research Blvd Health Extras Rockville, MD 20850 Pharmacy Provider Agreement 01/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1000 Gibraltar Drive Lease - Equipment Health Now/WPM Milpitas, CA 95035-6312 (Blood Pressure Machines) 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Health Resource Publishing Company - Division Of Carolina 515 Olive Street Coupons St. Louis, MO 63101 Information Service Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 255 N. Washington St., Healthguard International, Suite #202 PO Box Lease - Equipment 03/01/02 0.00 Inc. - f/k/a Viastat 75570 Baltimore, MD 21275 (Blood Pressure Machines) - -------------------------------------------------------------------------------------------------------------------------------- 255 N. Washington St., Healthguard International, Suite #202 PO Box Lease - Equipment Inc. - f/k/a Viastat 75570 Baltimore, MD 21275 (Blood Pressure Machines) 01/01/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 8547 East Arapahoe Road #J305 Greenwood Healthtrans Village, CO 80112-1430 Pharmacy Participation Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Hilton Food Market, Inc. d/b/a Hilton 98 South Ave Franchise Store Agreement - Big M Hilton, NY 14468 Big M #835 (Hilton, NY) 01/13/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Hinkley Real Estate PO Box 892 Lease - Bilo Store #9302 c/o Kirk Hinkley, Jr. Hallstead, PA 18822 (Hallstead, PA) 06/05/62 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Homer Avenue Plaza, LLC #7 Route 96 c/o Bonnie Carpineta Owego, NY 13827 Lease - P&C Store #3124 (Cortland, NY) 2/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 130 South Pointe Drive Hometown Coffee Company Bridgeville, PA 15017 Purchasing Agreement 02/10/03 14,127.19 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 867 Hornell Associates LLC Buffalo, NY 14240 Lease - P&C Store #3122 (Hornell, NY) 02/17/90 5,512.05 - -------------------------------------------------------------------------------------------------------------------------------- Rt. 53, Woodward Plaza Howard G. Moyer, Inc. P.O. Box 187 Franchise Store Agreement - 08/27/84 0.00 d/b/a Howard's Bilo Houtzdale, PA 16651 Bilo (#771 Houtzdale, PA) - -------------------------------------------------------------------------------------------------------------------------------- 500 W Main St PO Box 1438 Humana, Incorporated Louisville, KY 40201 Pharmacy Provider Agreement 01/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 15 Public Street Bicentennial Bldg Suite Humford Equities 212 Wilkes-Barre,PA 18701-1798 Lease - Bilo Store #9306 (Dallas, PA) 02/13/86 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Hummingbird PO Box 8500-3885 Software License & Communication Ltd Philadelphia, PA 19178-3885 Maintenance Agreement 02/01/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2449 Bedford Street Franchise Store Agreement - Ideal Supermarkets, Inc. Johnstown, PA 15904 Ideal Market #710 (Johnstown, PA) 02/24/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 7247-7482 Information Builders Philadelphia, PA 19170-7482 Webfocus Maintenance Agreement 12/10/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 7247-7482 Information Builders Philadelphia, PA 19170-7482 Webfocus Maintenance Agreement 12/10/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 60000 File #92127 Informix Software, Inc. San Francisco, CA 94160-2127 Software License & Service Agreement 12/10/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Innovax Concepts PO Box 168085 Master Software/Hardware Corporation Irving , TX 75016-8085 License Agreement 05/25/95 2,000.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 910561 Software/Hardware License & Intactix International Inc. Dallas, TX 75391-0561 Maintenance Agreement 03/02/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1770 Indian Trail Road License Agreement - International Banking Norcross, GA 30093 P&C Store #3025 (Cicero, NY) 03/29/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1770 Indian Trail Road License Agreement - International Banking Norcross, GA 30093 P&C Store #3093 (Oswego, NY) 03/29/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1770 Indian Trail Road License Agreement - P&C Store #3140 International Banking Norcross, GA 30093 (North Syracuse, NY) 11/29/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1770 Indian Trail Road License Agreement - International Banking Norcross, GA 30093 P&C Store #3194 (Towanda, NY) 05/31/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- James F Ford, Jr c/o Farmers 201 Market Street Associate Lease Agreement - Bilo National Bank Kittanning, PA 16201 Store #789 (Rimersburg, PA) 09/20/88 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 3704 Harwick Place Lease - Quality Store #6610 Janette T. Fulkerson Charlotte, NC 28211 (Union City, PA) 09/22/72 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 3704 Harwick Place Lease - Quality Store #6605 Janette T. Fulkerson Charlotte, NC 28211 (Corry, PA) 06/25/73 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 3704 Harwick Place Lease - Quality Store #6626 Janette T. Fulkerson Charlotte, NC 28211 (Kane, PA) 05/28/81 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 8759 Honeycomb Path Lease - P&C Store #3074 Jeanine Carnes Cicero, NY 13039-6806 (Clyde, NY) 10/19/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Jerrico, 101 Jerrico Drive Inc. PO Box 11988 Sublease - Bilo Store #9210 d/b/a: Long John Silvers Lexington, KY 40579 (Johnstown, PA) 03/06/74 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Jessup Family Foods, Inc. d/b/a 56 West Main Street Franchise Store Agreement - Big M Canisteo Big M Canisteo, NY 14823 #804 (Canisteo, NY) 11/26/79 0.00 - -------------------------------------------------------------------------------------------------------------------------------- John C. Kosco, Inc. 1 Baker Alley Franchise Store Agreement - Bilo d/b/a Ridgeway Bilo Ridgway, PA 15853 #776 (Ridgeway, PA) 08/31/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- John G. Dumblewski d/b/a Adirondack Towing PO Box 310 And Repair Hogaman, NY 12086 Lease - P&C Store #3531 (Amsterdam, NY) 03/21/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Jo-Mart 914 Elizabeth Street Houtzdale, PA 16651-8500 Jo-Mart Mortgage 04/03/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 7911 Belcherwood Road Lease - P&C Store #3060 Judy W.Brown Chesterfield, VA 23832 (Gouverneur, NY) 11/11/80 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 480 K&B Development of Canton LockPOrt, NY 14095 Lease - P&C Store #3090 (Canton, NY) 2/15/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- K.B.H., Rt. 22 & 220 Po B 156 Inc. d/b/a Duncansville Duncansville, PA Franchise Store Agreement - Bilo #724 02/03/86 0.00 Riverside Market 16635 (Duncansville, PA) - -------------------------------------------------------------------------------------------------------------------------------- Karen Kim, Inc. West First And Utica Street Franchise Store Agreement - Big M d/b/a Paul's Big M Oswego, NY 13126 #870 (Oswego, NY) 01/17/77 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Keuka Properties Inc c/o 214 East Church Street Lease - P&C Store #3138 Mary Jo Yunis Elmira, NY 14901 (Watkins Glenn, NY) 01/01/97 7,460.66 - -------------------------------------------------------------------------------------------------------------------------------- Key Bank 2025 Ontario Street 4th Floor License Agreement - quality Store National Associatation Cleveland, OH 44115 #6661 (Jamestown, NY) 10/24/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2375 Telstar Drive Suite 170 Kincaid Technologies ColoradoSprings, CO 80920 Master Software License Agreement 09/27/99 2,928.28 - -------------------------------------------------------------------------------------------------------------------------------- Lane Provision Co., Inc. d/b/a Route 30 Franchise Store Agreement - Big M #714 Charles Johns Big M Speculator, NY 12164 (Speculator, NY) 04/29/85 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Laramie St. Mary's LP c/o 600 Grant Street 14Th Floor Lease - Bilo Store #9208 CB Richard Ellis Pittsburg Pittsburgh, PA 15219 (St. Mary's, PA) 08/14/94 9,241.64 - -------------------------------------------------------------------------------------------------------------------------------- 480 Forest Park Road Franchise Store Agreement - Big M Larry Hall Oldsmar, FL 34677 #724 (Syracuse, NY) 01/01/88 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 86 Sds-12-1095 1300 Godward St. Lawson Software Inc. Minneapolis, MN 55486-1095 Service Agreement 08/28/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 86 Sds-12-1095 1300 Godward St. Lawson Software Inc. Minneapolis, MN 55486-1095 Service Agreement Addendum 08/28/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 86 Sds-12-1095 1300 Godward St. Software License & Lawson Software Inc. Minneapolis, MN 55486-1095 Maintenance Agreement 08/28/97 775.68 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 86 Sds-12-1095 1300 Godward St. Software License & Lawson Software Inc. Minneapolis, MN 55486-1095 Maintenance Agreement Addendum 08/28/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 86 Sds-12-1095 1300 Godward St. Software License & Lawson Software Inc. Minneapolis, MN 55486-1095 Maintenance Agreement Addendum 01/28/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2100 Van Deman Street Holabird Industrial Lesaffre Yeast Park Baltimore, MD 21224 Lease - Equipment (Cream Yeast System) 12/29/93 69,811.91 - -------------------------------------------------------------------------------------------------------------------------------- 2401 West Monroe Levi Ray & Shoup Inc. Springfield, IL 62704 Software License Agreement 06/17/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Levin Properties PO Box 326 c/o Linda Hagan Plainfield, NJ 7061 Lease - Quality Store #6662 (Erie, PA) 01/05/93 40,795.47 - -------------------------------------------------------------------------------------------------------------------------------- Lewis County Hospice 7785 N State St Pharmacy Lowville, NY 13367 Pharmacy Provider Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lexington Mall Partners, 101 Lakemont Park Blvd Lease - Bilo Store #9047 (Altoona, NY) 12/01/02 1,571.31 L.P. c/o Andrea PO Box 2566 Cohen Altoona, PA 16603 - -------------------------------------------------------------------------------------------------------------------------------- Liberatore's Foods, Inc. 76-80 South Main Street Franchise Store Agreement - d/b/a Warsaw Big M Warsaw, NY 14569 Big M #855 ( Warsaw, NY) 08/08/77 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1000 Gibraltar Drive Lifescan, Inc. Milpitas, CA 95035-6312 Marketing Fund Agreement 05/19/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lima Clover Farm, Inc. 7277 West Main Street Franchise Store Agreement - d/b/a Milburn's Big M Lima, NY 14485 Big M #836 (Lima, NY) 03/01/75 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lincoln Center North, LLC PO Box 681, Lincoln, NH 03251 Lease - P&C Store #3157 (Lincoln, NH) 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lingle's Real Estate, LLC c/o William & Mary 304 Park Avenue Associate Lease Agreement - Bilo 08/27/95 0.00 Lingle Lock Haven, PA 17745 Store #719 (Renova, PA) - -------------------------------------------------------------------------------------------------------------------------------- Lingle's Real Estate, LLC c/o 304 Park Avenue Associate Lease Agreement - Bilo William & Mary Lingle Lock Haven, PA 17745 Store #734 (Jersey Shore) 08/25/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lingle's Real Estate, Llc C/O 304 Park Avenue Associate Store Agreement - Bilo William & Mary Lingle Lock Haven, PA 17745 Store #719 (Renova, PA) 07/27/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Loson Bros., Inc. Route 31 Box 410 Franchise Store Agreement - d/b/a Loson's Big M Lyons, NY 14489 Big M #701 (Lyons, NY) 12/01/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Loson Bros., Inc. d/b/a Kendall Street Franchise Store Agreement - Big M Clifton Springs Big M Clifton Springs, NY 14432 #708 (Clifton Springs, NY) 07/15/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Louis C. Licari Supermarket,Inc. Lamberson Street Franchise Store Agreement - Big M #890 d/b/a Dolgeville Big M Dolgeville, NY 13329 (Dolgeville, NY) 02/12/84 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Louis C. Licari Supermarkets, Inc d/b/a 19 River Street Franchise Store Agreement - Big M Fort Plains Big M Fort Plains, NY 13339 #752 (Fort Plains, NY) 03/28/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lyons National Bank PO Box 380 Lyons, NY 14489 Sublease - P&C Store #3126(Macedon,NY) 09/25/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Madia's Supermarket, 316 Castle Street Franchise Store Agreement - 01/28/85 0.00 Inc. Geneva, NY 14456 Big M #897 (Geneva, NY) d/b/a; Madia's - -------------------------------------------------------------------------------------------------------------------------------- Main Plaza 100 State Street, Suite 316 Lease - Quality Store #6670 10/01/00 31,997.16 Co. c/o Technical Erie, PA (Dunkirk, NY) Development Corporation 16507 - -------------------------------------------------------------------------------------------------------------------------------- Main Street Mall Main Street Salon 100 North Main Street Sublease - Bilo Store #9003 10/25/01 0.00 Dubois, PA 15801 (Dubois, PA) - -------------------------------------------------------------------------------------------------------------------------------- Various Agreements relating to the Reciprocal Easement Agreement Mannion & Copani 224 Harrison Street, Governing Certain Real Property at 08/15/72 0.00 Suite 306 the Fayetteville Mall in Syracuse, NY 13202 Fayetteville, New York - -------------------------------------------------------------------------------------------------------------------------------- Manugistics 2115 East Jefferson Street Software License Agreement 04/06/01 0.00 Rockville, MD20852 - -------------------------------------------------------------------------------------------------------------------------------- 2024 Sproul Road Lease - Bilo East Store #4342 Mar-Ann Holdings Associates Broomall, PA 19008 (Honesdale, PA) 05/17/56 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Mark R. Route 49 Franchise Store Agreement - 01/30/98 0.00 Howe Osceola, PA 16942 Big M #763 (Osceola, PA) d/b/a Osceola Big M - -------------------------------------------------------------------------------------------------------------------------------- 1017 Hioaks Road Apt.132 Lease - P&C Store #3060 Mary M. Widener Richmond, VA 23225 (Gouverneur, NY) 11/11/80 405.41 - -------------------------------------------------------------------------------------------------------------------------------- Massena HHSC, 215 West Church Road Inc. Suite 107 King of c/o G&A Group, Inc. Prussia, PA 19406 Lease - P&C Store #3188 (Massena, NY) 01/29/95 24,213.85 - -------------------------------------------------------------------------------------------------------------------------------- 1849 South 6th Street Sublease - Bilo Store #9210 Mattress Emporium Indiana, PA 15701 (Johnstown, PA) 09/16/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- McDonalds Corporation c/o Mr. Peter T. Manikas PO Box 192 Bath , NY 14810 Sublease - P&C Store #3115 (Bath, NY) 03/08/74 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Mcnamara Foods, Inc. d/b/a 1520 Spencerport Rd Franchise Store Agreement - Big M Gates Big M Rochester, NY 14606 #892 (Rochester, NY) 10/30/83 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1330 Parkway Drive Medibag Company, Inc. Dayton, Ohio 45432 Pharmacy Service Agreement 01/20/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Medimpact Health 10680 Treena Street 5th Floor Care Systems, Inc. San Diego, CA 92131 Pharmacy Service Agreement 09/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Medimpact Health 10680 Treena Street 5th Floor Care Systems, Inc. San Diego, CA 92131 Pharmacy Service Agreement 04/23/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 6400 Glenwood Suite 104 Medtrak Services Overland Park, KS 66202 Pharmacy Services Agreement 01/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Meleo Associates 1171 Titus Avenue Franchise Lease Agreement - Big M c/o Phyllis Erwin Rochester, NY 14617 Store #892 (Rochester, NY) 11/16/83 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 391180 Memberhealth Cleveland, Ohio 44139 Pharmacy Participation Agreement 10/26/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Mercik's Markets, Vinco Plaza LLC 2690 William Penn Avenue Franchise Store Agreement - Bilo 01/19/02 0.00 d/b/a Mercil's Vinco Bilo Johnstown, PA 15909 #736 (Johnstown, PA) - -------------------------------------------------------------------------------------------------------------------------------- Merck - Medco 100 Parsons Pond Drive Paid Prescriptions Franklin Lakes, NJ 07417 Pharmacy Network Agreement 05/19/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Mexico Foods, Inc. 3385 Main Street Franchise Store Agreement - d/b/a Eddies's Big M Mexico, NY 13114 Big M #823 (Mexico, NY) 04/17/78 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Michael Vogel d/b/a 309 Venango Street Franchise Store Agreement - Bilo Cambridge Springs Bilo Cambridge Springs, PA 16403 #745 (Cambridge Springs, PA) 10/29/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 5540 Microsoft Pleasanton, CA 94566-9940 Open License Agreement 12/13/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Microstrategy Services PO Box 75014 Software License & Corporation Baltimore , MD 21275 Maintenance Agreement 01/18/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Midcourt Builders Corp, Old Thompson Road Lease - P&C Store #3114 01/01/95 0.00 Brooklawn Mattydale, NY 13211 (Skaneateles, NY) c/o Guy Easter - -------------------------------------------------------------------------------------------------------------------------------- 150 E Palmetto Park Road Suite 400 Boca Milestone Properties, Inc. Raton, FL 39432 Lease - Bilo Store #9231 (Dubois, PA) 02/01/82 10,050.20 - -------------------------------------------------------------------------------------------------------------------------------- 33 North Road PO Box 3704 MIM Health Plans, Inc. Wakefield, RI 02879 Pharmacy Participation Agreement 01/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Miracle Mile Realty LLC 7 Essex Green Drive Suite 56 Attn: Philip Pastan Peabody, MA 01960 Lease - P&C Store #3145 (Lebanon, NH) 08/01/99 31,909.41 - -------------------------------------------------------------------------------------------------------------------------------- Miracle Mile Realty LLC 7 Essex Green Drive Suite 56 Parking Lot Lease related to P&C Attn: Philip Pastan Peabody, MA 01960 Store #3145 (Lebanon, NH) 11/24/67 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 200 Holleder Parkway Sublease - P&C Store #3090 Monro Muffler Brake, Inc. Rochester, NY 14615 (Canton, NY) 08/31/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 7801 East Bush Lake Road #450 Sublease - P&C Store #3068 Movie Brands, Inc. Edina, MN 55439 (Canastota, NY) 10/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- P.O. Box 397 Mr. Rich Rullo Holsopple, PA 15935 Lease - Bilo Store #9043 (Windber, PA) 03/02/79 0.00 - -------------------------------------------------------------------------------------------------------------------------------- RR3 Box 271 B Murrays Freightliners, Inc. Dubois, PA 15801 Lease - Vehicle (5 tractors) 04/01/03 28,314.04 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 99611 Nashua Label Products Chicago, IL 60690-6911 Label Supply Agreement 05/01/01 19,604.11 - -------------------------------------------------------------------------------------------------------------------------------- Re Leasing 46-06-403 National City Bank #219 116 Allegheny Center Sublease - Bilo Store #9219 10/14/96 0.00 Mall Pittsburgh, PA 15212 (Titusville, PA) - -------------------------------------------------------------------------------------------------------------------------------- National City Bank 226 Allegheny Center Mall ATM Agreement - of Pennsylvania Pittsburgh, PA 15212 Quality Store #6662 (Erie, PA) 10/05/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- National Medical 23 British American Blvd Health Card Systems Latham , NY 12110 Pharmacy Provider Agreement 05/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- NDC Plaza NDC Health Corporation Atlanta, GA 30329-2010 Pharmacy Service Agreement 04/28/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 101865 NDC Health Corporation Atlanta, GA 30329 Pharmacy Service Agreement Amendment 09/04/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 101865 NDC Health Corporation Atlanta, GA 30329 harmacy Service Agreement Amendment 3/09/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 101865 NDC Health Corporation Atlanta, GA 30329 Pharmacy Service Agreement Amendment 06/28/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- NDC Plaza NDC Health Corporation Atlanta, GA 30329-2010 Pharmacy Service Agreement Amendment 06/04/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- NDC Plaza NDC Health Corporation Atlanta, GA 30329-2010 Pharmacy Service Agreement Amendment 12/26/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- NDC Plaza NDC Health Corporation Atlanta, GA 30329-2010 Pharmacy Service Agreement Amendment 01/01/05 56,153.36 - -------------------------------------------------------------------------------------------------------------------------------- New Plan East, 4306 East Genesee Street Lease - P&C Store #3066 04/01/88 405.41 LLC. c/o Empire Management Dewitt, NY 13214 (Cazenovia, NY) - -------------------------------------------------------------------------------------------------------------------------------- 4688 Collections Center Drive New Plan Excel Realty Trust Chicago, IL 60693 Lease - P&C Store #3123 (Ithaca, NY) 01/01/95 75,400.16 - -------------------------------------------------------------------------------------------------------------------------------- New Plan Excel Realty 1120 Avenue of the America's Lease - Quality Store #6672 05/05/91 18,342.93 Trust c/o Jackie Taylor New York, NY 10036 (Dunkirk, NY ) - -------------------------------------------------------------------------------------------------------------------------------- New York Blood Pressure, 1355 Pittsford and Mendo Road Lease - Equipment 05/05/91 0.00 Inc. PO Box 471 Mendon, NY 14506 (Blood Pressure Machines) - -------------------------------------------------------------------------------------------------------------------------------- North Atlantic 223 Genesee Street Lease - P&C Store #3103 Development, Inc. Oneida NY 13421 (Chittenango, NY) 07/16/70 2,600.48 - -------------------------------------------------------------------------------------------------------------------------------- Northern Federal 120 Factory Street Credit Union Watertown, NY 13601 ATM Contract 04/26/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Lease - Franchise Lese Agreement - Northern Territory, LLC PO Box 190 Mexico, NY 13114 Big M #823 (Mexico, NY) 09/04/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Northington Holdings, Inc. c/o Paul 196 Northington Ave Lease - Quality Store #6674 Synder, III East Amherst, NY 14051 (Westfield, PA) 04/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2 Liberty Street Northwest Savings Bank Warren, PA 16365 ATM Contract 05/12/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1 West Pack Square Now Technology BB&T Building Suite Medicare Backend Service Agreement 01/23/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 7247 - 7482 Nuvision Technologies, Inc. Dallas, TX 75234 Maintenance Agreement 05/07/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1220 Washington Avenue Lease - State Fair Blvd Warehouse NYS Department of Room 422 Parking Lot (NIMO) (Syracuse, NY) 03/31/04 0.00 Transportation Albany, NY 12232 Automatic renewl - -------------------------------------------------------------------------------------------------------------------------------- Old West Wash House c/o Bilo Plaza Scalp Ave Sublease - Bilo Store #9210 Ronald R And Joann Rother Johnstown, PA 15904 (Johnstown, PA) 12/19/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 4 Taft Court Optimum Choice Rockville, MD 20850 Pharmacy Participation Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 71028 Oracle Corporation Chicago, IL 60694-1028 Software License & Service Agreement 02/23/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 71028 Software License & Service Oracle Corporation Chicago, IL 60694-1028 Agreement Amendment 02/23/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Orrstown Bank 427 Stonehedge Drive Lease - Bilo East Store #4340 Laferty Acct # 413747 Carlisle, PA 17013 (Hawley, PA) 10/22/55 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 215 West Church Rd Suite 107 Oswego Associates, LLC King of Prussia, PA 19406 Lease - P&C Store # 3093 (Oswego, NY) 07/07/94 14,754.10 - -------------------------------------------------------------------------------------------------------------------------------- Overdoroff Attn: Leigh PO Box 1420 Lease - Bilo Store #9048 Volchko Clearfield, PA 16830-1420 (Hollidaysburg, PA) 10/21/02 1,687.98 - -------------------------------------------------------------------------------------------------------------------------------- Ovid Cloverfarm, Inc. Franchise Store Agreement - Big M d/b/a Ovid Big M Main Street Ovid, NY 14521 #878 (Ovid, NY) 07/27/81 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Owens-Illinois - One Seagate Plastic Group Toledo, Ohio 43666 Pharmacy Supply Agreement 10/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- P. G. International, Seward Bilo Franchise Store Agreement - Bilo ) 06/30/89 0.00 Inc. d/b/a Seward Bilo Seward, PA 15954 #786 (Seward, PA - -------------------------------------------------------------------------------------------------------------------------------- Pacific Employers 1601 Chestnut Street, Insurance Contract Philadelphia, PA 13221 ACE Program Agreement 03/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Paremte Family Partnership 45 Owen Street Lease - Bilo East Store #4344 Attn: Angelo Bertinelli Forty-Fort, PA 18704 (Dallas, PA) 12/09/69 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 58 South Pollard Drive PO Box 729 Franchise Lease Agreement - Big M Pauline Mirabito Fulton, NY 13069 Store #729 (Fulton, NY) 02/01/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 300 TecheCenter Drive Suite B PBM Plus Milford, OH 45150 Pharmaceutical Care Network Agreement 01/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PCS Health Systems 6501 East Shea Blvd Incorporated Scottsdale, AZ 85260 Pharmacy Participation Agreement 01/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Penns Village Shopping 182 Buchanan Trail Suite 195 Lease - Bilo Store #9260 Center c/o Ray Kootz Mcconnellsburg, PA 17233 (McConnellsburg, PA) 03/18/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ox Bow Road RR3 Box 8-A Sublease - P&C Store #3068 Pepi's II Canastota, NY 13032 (Canastota, NY) 12/01/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Perry's Family Enterprises, 58 Spring Street Franchise Store Agreement - Inc. d/b/a Perry's Big M Norwood, NY 13668 Big M #871 (Norwood, NY) 01/07/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Peterson & Nellis 207 Pine Street Sublease - P&C Store #3068 Physical Therapy Syracuse, NY 13210 (Canastota, NY) 05/30/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PGI International Inc d/b/a Seward Route 711 Box 2 Associate Store Agreement - Bilo Riverside Markets Seward, PA 15954 Store #786 (Seward, PA) 06/30/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 6956 George Washington Highway Pharmacare Lincoln, RI 02865 Retail Pharmacy Network Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1666 Race Street Pharmacy Choice Denver, CO 80206 Pharmacy Participation Agreement 02/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Pharmacy Plus Sytems c/o Web MD 2045 Midway Drive Pharmacy Participation Agreement 01/01/05 0.00 Corporation Twinsburg, OH 44087 - -------------------------------------------------------------------------------------------------------------------------------- 1531 Airway Circle New Smyrna Beach, FL Pharmex 32168-5900 Pharmacy Software License Agreement 05/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Pioneer 250 South Clinton Street Easement Agreement - Manangement Services Syracuse, NY 13202 P&C #3115 (Bath, NY) 09/09/74 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1207 Delaware Avenue Parking Lot Easement - Plaza Group Buffalo, NY 14209 Quality #6671 (Fluvanna, NY) 06/28/85 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 215 E. Market Street Sublease - PLCB Blairsville, PA 15717 Bilo Store #9249 (Blairsville, PA) 01/31/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Pomerleau Real Estate Co. c/o Ernest A 69 College Street Lease - P&C Store #3238 Pomerleau Burlington, VT 5402 (Colchester, VT) 11/01/02 18,699.91 - -------------------------------------------------------------------------------------------------------------------------------- Portage Land Corp 240 South 13th Ave. Lease - Quality Store #6624 c/o Susan Rogers Coatesville, PA 19320 (Mayville, NY) 07/01/01 43,036.87 - -------------------------------------------------------------------------------------------------------------------------------- Four Cathedral Park PO Box 867 Potsdam Associates Buffalo, NY 14240-0867 Lease - P&C Store #3125 (Potsdam, NY) 05/01/95 7,234.67 - -------------------------------------------------------------------------------------------------------------------------------- Previte Brothers Realty Co. c/o Rocco 2106 Bigler Avenue PO Box 398 Previte Northern Cambria,PA 15714- 0398Lease - Bilo Store #9229 (Spangler,PA) 02/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Quickie Manufacturing 8688 Finlarig Corporation Dublin, OH 43017 Purchasing Agreement 02/02/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- R J Kuhn 55th and A.V.R.R Lease - Bilo Store #9256 11/01/01 20,515.61 Company Pittsburgh, PA (Natrona Heights, PA) Attn: Auditing 15201-2005 - -------------------------------------------------------------------------------------------------------------------------------- RC & RD Pietrafesa 301 Learbury Centre Lease - P&C Store # 3089 c/o Frank Bahouth, Jr. Syracuse, NY 13203 (Owego, NY) 03/01/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Redinger Realty, Inc. 1533 W. 38Th St. c/o Diane Dinger Erie, PA 16502 Lease - Quality Store #6664 (Erie PA) 02/18/02 12,955.89 - -------------------------------------------------------------------------------------------------------------------------------- 201 Main Street Suite 800 Reinhart Real Estate Group LaCrosse, WI 54602 Lease - Bilo Store #9290 02/13/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 5700 Tennyson Parkway 3rd Floor Sublease - Bilo Store #9210 Rent A Center Inc. Plano, TX 75024 (Johnstown, PA) 09/16/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 2101 Ken Pratt Boulevard Suite 105 Reveal Systems Inc Longmont, CO 80501 Software License Agreement 12/04/01 275.00 - -------------------------------------------------------------------------------------------------------------------------------- RG & JG Corporation 55 Main Street Franchise Store Agreement - Big M d/b/a Ron's Big M Philadelphia, NY 13673 #846 (Philadelphia, NY) 01/01/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 5368 Georgetown Road Sublease - Rich Hosier Franklin, PA 16323 Quality Store #6675 (Kane, PA) 04/04/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 397 Rich Rullo Holsopple, PA 15935 Lease - Bilo Store #9043 (Windber, PA) 07/01/04 24,525.41 - -------------------------------------------------------------------------------------------------------------------------------- Richard & Mary Schwartz 625 Frew Run PO Box 494 Lease - Quality Store #6686 11/01/02 53.47 Frewsburg, NY 14738 (Westfield, NY) - -------------------------------------------------------------------------------------------------------------------------------- 29 South Second Street Associated Lease Agreemet - Bilo Richard Gathagan Clearfield, PA 16830 Store #771 (Houtzdale, PA) 08/28/84 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Roadway Pharmacy, Inc. c/o 108 Timberlane Drive Associate Lease Agreement - Bilo Laurel Szymkowiak Ligonier, PA 15658-9720 Store #786 (Seward, PA) 06/16/76 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Robert Delf, Inc. 1 Park Lane Box 5 Franchise Store Agreement - d/b/a Bob's Big M Wolcott, NY 14590 Big M #741 (Wolcott, NY) 12/22/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 6 Robert S. Moss Conneaut Lake, PA 16316 Lease - Quality Store #6663 (Erie, PA) 01/01/95 2,754.32 - -------------------------------------------------------------------------------------------------------------------------------- 4895 Riverbend Road Rocky Mountain Retail Suite D Boulder, Systems, Inc. CO 80301 Software License Agreement 09/17/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 4895 Riverbend Road Rocky Mountain Retail Suite D Boulder, Systems, Inc. CO 80301 Software License Agreement Addendum 09/17/04 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Rod's Food Market, Inc. d/b/a Rod's 10916 Us Route 11 Franchise Store Agreement - Big M Adams, NY 13605 Big M #725 (Adams NY) 01/31/88 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Rog-Glo Ltd. 4 South Main Street Franchise Store Agreement - Big M d/b/a Sherburne Big M Sherburne, NY 13460 #861 (Sherburne, NY) 10/16/78 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Bradenton River Post Office, Ronald Benderson 1995 Trust Bradenton, FL 34204-1199 Lease - P&C Store #3130 (Syracuse, NY) 09/26/94 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ronald W. & Patricia L. Birdsall c/o Ronald W 207 Fairfax Street Franchise Lease Agreement - Big M Birdsall Horseheads, NY 14845 Store #767 (Spencer, NY) 09/01/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ropodo Corp 1564 Route 507 Sublease - Bilo d/b/a: Dutch's Market Greentown, PA 18426-9305 East Store #4342 (Honesdale, PA) 05/18/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 5940 West Toughy Ave. RPH On The Go USA, Inc. Niles, IL 60714 Interm Staffing Services Agreeement 06/02/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1666 Race Street RPH Recruiter - Rxtemp Denver, CO 80206 Interm Staffing Services Agreeement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Rx America 221 Cjarles Lindberun Drive Pharmacy Network Agreement 01/01/05 0.00 Salt Lake City, UT 84116-2902 - -------------------------------------------------------------------------------------------------------------------------------- 1666 Race Street Rx Temp Denver, CO 80206 Interm Staffing Services Agreeement 02/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Ryan Food Markets, 73 North Main Street Inc. d/b/a Ryan's Brockport, NY 14420 Franchise Store Agreement - Big M 03/06/88 0.00 Big M #726 (Brockport, NY) - -------------------------------------------------------------------------------------------------------------------------------- 512 Brinker Ave. S&L Solutions, LLC Latrobe, PA 15650 Pharmacist Temperary Staffing Company 09/24/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Salvation Army - Scranton 1155 River Street PO Box 3064 Sublease - Bilo East Store #4344 03/23/98 0.00 Scranton, PA 18505 (Dallas, PA) - -------------------------------------------------------------------------------------------------------------------------------- Sandy Creek Food Market, Inc d/b/a Sandy Route 11 Franchise Store Agreement - Big M Creek Big M Sandy Creek, NY 13145 #766 (Sandy Creek, NY) 01/01/76 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 224 N. Park Ave. Sav-Rx Advantage Fremont, NE 68025 Pharmacy Benefits Agreement 09/01/02 146.00 - -------------------------------------------------------------------------------------------------------------------------------- Scriptsave Medical PO Box 61833 Security Card Company Phoenix, AZ 85082-1833 Pharmacy Network Agreement 08/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Seaway Acquisition 221 Walton St. Suite 100, Lease - P&C Store #3054 Company, LLC. Syracuse, NY 13202 (Watertown, NY) 11/01/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Seaway Acquisition 221 Walton St. Suite 100, Lease - P&C Store #3050 Company, LLC. Syracuse, NY 13202 (Ogdensburg, NY) 09/29/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 9051 W Heather Ave Serv-U Prescription PO Box 240034 Services Milwaukee, WI 53224 Pharmacy Agreement 01/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Various Agreements relating to the Reciprocal Easement Agreement Seventh Brook Properties, Stickley Drive Governing Certain Real Property at 08/15/72 0.00 LLC Manlius, NY 13104 the Fayetteville Mall in Attn: Alfred J. Audi Fayetteville, New York - -------------------------------------------------------------------------------------------------------------------------------- PO Box 820067 Maintenance Agreement on Software Plus Inc Vicksburg, MS 39182-0067 Price Master Plus 12/06/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Somerset Associates 14 North Peoria, Unit 3-F Lease - Bilo Store #9225 c/o Spatz Centers, Inc. Chicago, IL 60607 (Somerset, PA) 08/01/93 12,391.57 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 777 Somerset Trust Company Somerset, PA 15501 ATM Contract 08/15/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- South Point Realty 24 Rutledge Street , Group, LLC Brooklyn NY 11211 Lease - P&C Store #3084 (Elmira, NY) 06/01/93 4,595.64 - -------------------------------------------------------------------------------------------------------------------------------- St. Albans Shopping Center, PO Box 6 Burlington, VT 5402 Lease - P&C Store #3287 02/01/04 1,107.94 Inc. (White River Junction, VT) c/o Antonio B. Pomerleau - -------------------------------------------------------------------------------------------------------------------------------- St. Lawrence Federal 333 State Street Credit Union Ogdensburg, NY 13669 ATM Contract 04/01/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Starika, LLC 964 Creager Road Franchise Lease Agreement - Big M 10/02/02 0.00 c/o Richard Cross Union Springs, NY 13160 Store #737 (Union Springs, NY) - -------------------------------------------------------------------------------------------------------------------------------- Stateway Plaza Shopping 5757 Cavendish Blvd Center c/o Allan Spevack Montreal, QE H4W2W8 Lease - P&C Store #3152(Watertown, NY) 01/11/89 12,059.83 - -------------------------------------------------------------------------------------------------------------------------------- Commerce Services Group Sterling Commerce PO Box 73199 (America), Inc. Chicago, IL 60673 Network Service Agreement 09/09/02 8,871.79 - -------------------------------------------------------------------------------------------------------------------------------- Commerce Services Group Sterling Commerce PO Box 73199 (America), Inc. Chicago, IL 60673 Network Service Agreement Amendment 09/08/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Commerce Services Group Sterling Commerce PO Box 73199 (America), Inc. Chicago, IL 60673 Network Service Agreement Amendment 02/14/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Commerce Services Group Sterling Commerce PO Box 73199 (America), Inc. Chicago, IL 60673 Software License Agreement 09/09/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Commerce Services Group Sterling Commerce PO Box 73199 (America), Inc. Chicago, IL 60673 Software Maintenance Agreement 09/30/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Struppler Enterprises, Inc. d/b/a Fulton 909 West First Street Franchise Store Agreement - Big M Fulton, NY 13069 Big M #729 (Fulton, NY) 01/18/89 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Supercuts, Inc #9989 c/o 7204 Metro Blvd Sublease - Quality Store #6629 Regis Corp. Minneapolis, MN 55439 (Williamsville, NY) 12/01/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 50 Tice Boulevard Software License & Syncsort Incorporated Woodcliff Lake, NJ 07677 Maintenance Agreement 12/31/85 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 50 Tice Boulevard Software License & Syncsort Incorporated Woodcliff Lake, NJ 07677 Maintenance Agreement 08/28/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Syracuse Windsor, LLC P. O. Box 1549 Lease - P&C Store #3140 c/o David Sussman Clifton Park, NY 12065 (North Syracuse, NY) 11/12/94 3,925.51 - -------------------------------------------------------------------------------------------------------------------------------- 5268 Main Street Sublease - Quality Store #6629 Szes Garden Company, Inc. Williamsville, NY 14221 (Williamsville, NY) 11/27/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Various Agreements relating to the Reciprocal Easement Agreement 08/15/72 0.00 Attn Property Administration; Governing Certain Real Property Target Corporation 1000 Nicollet Mall at the Fayetteville Mall in Property Development Minneapolis, MN 55403 Fayetteville, New York - -------------------------------------------------------------------------------------------------------------------------------- Teamsters Local 294 Labor Temple 890 Third Street Collective Bargaining Agreement - 02/04/01 0.00 Albany, NY12206 P&C Transportation - -------------------------------------------------------------------------------------------------------------------------------- Franklin Square Station Teamsters Local 317 566 Spencer Street Box 11037 Collective Bargaining Agreement - 04/01/01 0.00 Syracuse, NY 13218-1037 P&C Refrigeration and Maintenance - -------------------------------------------------------------------------------------------------------------------------------- Franklin Square Station 566 Spencer Street Box 11037 Collective Bargaining Agreement - Teamsters Local 317 Syracuse, NY 13218-1037 P&C Transportation 04/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Franklin Square Station 566 Spencer Street Box 11037 Collective Bargaining Agreement - Teamsters Local 317 Syracuse, NY 13218-1037 P&C Warehouse 04/01/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Box 200107 Techrx Inc Pittsburgh, PA 15251-0107 Software License Agreement 03/09/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 17124 Third Party Solutions Memphis, TN 38187 Claim Processor Agreement 01/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Thomas B. Ray 179 Westwood Drive Associate Store Agreement - Store 12/18/80 0.00 Clarion, PA 16214 #773 (New Bethlehem, PA) - -------------------------------------------------------------------------------------------------------------------------------- Thomas Family Limited Partnership 821 E. Bishop St. Franchise Store Agreement - Bilo d/b/a Bellafonte Bi-Lo Bellefonte, PA 16823 #770 (Bellefonte, PA) 02/01/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Thomas G. Ray, Inc. 632 Broad Street Franchise Store Agreement - Bilo d/b/a Tom's Riverside New Bethlehem, PA 16242 #773 (New Bethlehem, PA) 04/29/70 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 643 Maxwell Dr. Lease - Quality Store #6605 Thomas L. Tarr Titusville, PA 16354 (Corry, PA ) 06/25/73 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 643 Maxwell Dr. Lease - Quality Store #6610 Thomas L. Tarr Titusville, PA 16354 (Union City, PA) 09/22/72 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 643 Maxwell Dr. Thomas L. Tarr Titusville, PA 16354 Lease - Quality Store #6626 (Kane, PA) 05/28/81 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Tilgard Equipment 64 Patrick Circle Sublease - P&C Store #3115 (Bath, NY) 09/01/77 0.00 Company Attn: Fulton, NY 13069 Dave Till - -------------------------------------------------------------------------------------------------------------------------------- Timothy & Debra Morris Road R.D.1, Box 120 Franchise Lease Agreement - Big M Pettit, Inc. Munnsville, NY 13409 Store #757 (Morrisville, NY) 04/01/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Timothy & Debra Pettit, Inc. d/b/a Cambridge Avenue Franchise Store Agreement - Big M Morrisville Big M Morrisville, NY 13408 Store #757 (Morrisville, NY) 05/18/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1 North Main Street Sublease - Tioga State Bank Spencer, NY 14883 P&C Store #3089 (Owego, NY) 10/11/67 0.00 - -------------------------------------------------------------------------------------------------------------------------------- TJL Foods, Inc. 15 Main Street Franchise Store Agreement - Big M d/b/a Spencer Big M Spencer, NY 14883 #767 (Spencer, NY) 10/01/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 17752 Skypark Circle Suite 160 Total Control Information Irvine, CA 92614 Performance & Support Agreement 11/26/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 17752 Skypark Circle Suite 160 Performance & Support Total Control Information Irvine , CA 95614 Agreement Addendum 11/26/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Travelers Express 1550 Utica Ave Executive Office Company, Inc. Minneapolis, MN 55416 Money Orders/ Money Grams 11/01/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Travelers Express 1550 Utica Ave Executive Office Company, Inc. Minneapolis, MN 55416 Money Orders/ Money Grams/Utility Bills 09/17/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Tri County Developers 664 Water Street PO Box 6 Lease - Bilo Store #9218 c/o Bob Moss Conneaut Lake, PA 16316 (Meadville, PA) 06/07/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 664 Water Street PO Box Sublease - Bilo Store #9218 Tri-County Developers 6 Conneaut Lake, PA 16316 (Meadville, PA) 11/04/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Trupoint Marketing Sav-Rx 501 Shepherd St. #C2 Pharmacy Participation Agreement 09/14/02 0.00 Winston-Salem, NC 27103 - -------------------------------------------------------------------------------------------------------------------------------- Twin Rivers Federal 23 Phillips Street Credit Union Massena, NY 13662 ATM Contract 04/25/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- UFCW Local 1776 182 N. Pennsylvania Avenue Collective Bargaining Agreement - 07/23/00 0.00 Wilkes-Barre, PA 18701-3693 Bilo East (Old Acme Store s) - -------------------------------------------------------------------------------------------------------------------------------- 182 N. Pennsylvania Avenue Collective Bargaining Agreement - UFCW Local 1776 Wilkes-Barre, PA 18701-3693 Bilo East (Original Insalaco) 09/21/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 345 Southpointe Blvd Suite 300 Collective Bargaining Agreement - UFCW Local 23 Canonsburg, PA 15317 Riverside Drivers - Pennway Express 02/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 345 Southpointe Blvd Suite 300 Collective Bargaining Agreement - UFCW Local 23 Canonsburg, PA 15317 Riverside Laborers 12/25/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 345 Southpointe Blvd Suite 300 Collective Bargaining Agreement - UFCW Local 23 Canonsburg, PA 15317 Riverside Master 09/21/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 345 Southpointe Blvd Suite 300 Collective Bargaining Agreement - UFCW Local 23 Canonsburg, PA 15317 Riverside Technicians 05/01/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 345 Southpointe Blvd Suite 300 Collective Bargaining Agreement - UFCW Local 23 Canonsburg, PA 15317 Riverside Transportation 05/01/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 345 Southpointe Blvd Suite 300 Collective Bargaining Agreement - UFCW Local 23 Canonsburg, PA 15317 Riverside Warehouse 05/01/99 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 106 Memorial Parkway Collective Bargaining Agreement - UFCW Local One Utica, NY 13501 P&C Master 06/03/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 106 Memorial Parkway Collective Bargaining Agreement - UFCW Local One Utica, NY 13501 Quality Markets Buffalo Region 06/16/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 106 Memorial Parkway Collective Bargaining Agreement - UFCW Local One Utica, NY 13501 Quality Markets Master 06/11/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 106 Memorial Parkway Collective Bargaining Agreement - UFCW Local One Utica, NY 13501 Quality Markets Warehouse 01/15/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Union Real Estate 1500 Allegheny Building Co. c/o 429 Forbes Avenue Associate Lease Agreement - Bilo Ed Kernsey Pittsburgh, PA 15219 Store #777 (Harmony, PA) 07/03/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- United States Postal Service #214 Purchasing PO Box 40592 Sublease - Bilo Store #9214 Service Center Philadelphia, PA 19197-0592 (Johnstown, PA) 07/14/00 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 205 Park Lane Univera Healthcare Buffalo, NY 14221-5239 Participating Provider Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Universal Solutions 4045 University Parkway Pharmaceutical Services Agreement 06/01/01 7,591.49 Winston-Salem, NC 27106 - -------------------------------------------------------------------------------------------------------------------------------- 306 West Lockhart St., US Management Co. LLC Sayre, PA 18840 Lease - P&C Store #3139 (Sayre, PA) 12/01/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- US Script 1300 East Shaw Avenue, Optional Pharmacy Agreement 01/01/03 0.00 Suite 173 Fresno,CA 93710 - -------------------------------------------------------------------------------------------------------------------------------- 7170 N Financial Dr US Script Fresno, CA 93720 Pharmacy Participation Agreement 01/01/03 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Valeski's 4th Street 420 Rt. 119 North North 4Th Franchise Store Agreement - Bilo #751 03/23/85 0.00 Market, Inc. Street Ext. Indiana, PA 15701 (Indiana, PA) - -------------------------------------------------------------------------------------------------------------------------------- One Montshire Road Valley Net Inc. Norwich, VT 05055 Software License Agreement 10/07/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- P.O. Box 1410 Valu Home Center Buffalo, NY 14240 Sublease - P&C Store #3089 (Owego,NY) 11/12/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Valutech, Inc. 30021 Tomas Road Suite 250 Software License & Maintenance 11/30/89 0.00 Rancho Santa Marga, CA 92688 Agreement - -------------------------------------------------------------------------------------------------------------------------------- Van Scott Development Corp. 402 West Maple Avenue Franchise Lease Agreement - Big M c/o Alfred E. Loson Newark, NY 14513 Store #708 (Newark, NY) 12/01/71 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Verle And Dorothy Eighmey 220 High Street Troy, PA 16947 Lease - P&C Store #9076 (Troy, PA) 02/01/97 2,361.71 - -------------------------------------------------------------------------------------------------------------------------------- Vic Card's Food Shop, 22 Sheather Street Inc. d/b/a Hammondsport, NY 14840 Franchise Store Agreement - Big M #710 01/22/89 0.00 Hammondsport Big M (Hammondsport, NY) - -------------------------------------------------------------------------------------------------------------------------------- Video Circus of Sayre, Inc. 448 North Keystone Avenue Sayre, PA 18840 Sublease - P&C Store #3139 (Sayre, PA) 03/12/92 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 255 N. Washington St., VitaStat/ Life Clinic Suite #202 PO Box 75570 Lease - Equipment 03/09/02 9,000.00 Baltimore, MD 21275 (Blood Pressure Machines) - -------------------------------------------------------------------------------------------------------------------------------- W.E. Aubuchon Company 95 Aubuchon Drive Sublease - P&C Store #3105 Westminister, MA 1473 (West Carthage, NY) 09/08/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- WAJ Development Westview Station PO Box 25 Franchise Lease Agreement - Big M c/o Wayne Jones Binghamton, NY 13906 Store #738 (Windsor, NY) 12/01/96 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Wellpoint Pharmacy 8407 Fallbrook Avenue Management Attn: Pharmacy West Hills, CA Pharmacy Management Finance ( Af - 2) 91304 Agreement - Addendum 09/25/02 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Wellpoint Pharmacy 8407 Fallbrook Avenue Management Attn: Pharmacy West Hills, CA Finance (Af - 2) 91304 Pharmacy Management Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 6200 South Quebec Street Western Union Englewood, CO 80111 Service Agreement 02/05/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Westlake 753 James St., Suite B-1 Development, LLC Syracuse, NY 13203 Lease - P&C Store #3121 (Clay, NY) 03/01/89 5,127.13 - -------------------------------------------------------------------------------------------------------------------------------- Westvale Plaza 2102 West Genesee Street c/o Mike Santaro Syracuse, NY 13219 Lease - P&C Store #3100 (Syracuse, NY) 08/15/92 94,202.98 - -------------------------------------------------------------------------------------------------------------------------------- 300 Market Street Lease - Bilo Store #9214 Westwood Zamias Lp Johnstown, PA 15901 (Johnstown, PA) 11/29/91 7,818.86 - -------------------------------------------------------------------------------------------------------------------------------- WHP Health Initatives, 2275 Half Day Rd Incorporated Bannockburn, IL 60015 Pharmacy Network Agreement 01/01/05 0.00 - -------------------------------------------------------------------------------------------------------------------------------- 1000 Pittsford-Victor Road Lease - Quality Store #6649 Widewater Group Pittsford, NY 14534 (Lakewood, NY) 10/01/90 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Widewaters Pierce 5786 Widewaters Parkway Drive Associates Dewitt, NY 13214 Recipricol Agreement 3040 Fulton, NY 12/29/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- William B. Lingle, Jr. 150 15th Street Franchise Store Agreement - d/b/a Renovo Bilo Market Renovo, PA 17764 Bilo #719 (Renova, PA) 08/25/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- William B. Lingle, Jr. 701 Allegheny Street Franchise Store Agreement - Bilo d/b/a Jersey Shore Bilo Jersey Shore, PA 17740 #734 (Jersey Shore PA) 08/25/95 0.00 - -------------------------------------------------------------------------------------------------------------------------------- William E. & 109 Shagbark Lane Associate Lease Agreement - Bilo Carol L. Thomas Bellefonte, PA 16823 Store #770 (Bellefonte, PA) 02/01/91 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Windsor Orange County 38 Credit Ct PO Box 365 Credit Union White River Junction, VT 5001 ATM Contract 06/15/01 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Wyeth - Ayerst 555 E. Lancaster Ave. Pharmaceuticals St. Davids, PA 19087 Program Agreement 04/01/98 0.00 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 99262 Xtra Lease Chicago, IL 60693 Lease - 35 Remaining Trailers 03/27/02 919.52 - -------------------------------------------------------------------------------------------------------------------------------- PO Box 99262 Xtra Lease Chicago, IL 60693 Lease - 48 Trailers 01/01/97 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Yando's Store , 14 Skyway Plaza Inc. Plattsburg, NY 12901 Franchise Store Agreement - Big M 09/23/01 0.00 d/b/a Plattsburg Big M #860 (Plattsburgh, NY) - -------------------------------------------------------------------------------------------------------------------------------- Yando's Store , Inc. 350 East Main Street Franchise Store Agreement - d/b/a Yando's Big M Malone, NY 12953 Big M #728 (Malone, NY) 03/08/93 0.00 - -------------------------------------------------------------------------------------------------------------------------------- Various Agreements relating to the Reciprocal Easement Agreement Governing Certain Real Property 08/15/72 0.00 YMCA of Greater 340 Montgomery Street at the Fayetteville Mall in Syracuse, Inc. Syracuse, NY 13202 Fayetteville, New York - -------------------------------------------------------------------------------------------------------------------------------- Total Cure Amount 1,357,127.96 - --------------------------------------------------------------------------------------------------------------------------------
PLAN SCHEDULE 5.6 ----------------- LIST OF OFFICERS AND DIRECTORS OF REORGANIZED PENN TRAFFIC WITH THEIR AFFILIATIONS AND COMPENSATION [See Exhibit A to Order and Judgment Confirming the Plan] PLAN SCHEDULE 5.7 ----------------- January 20, 2005 CONFIDENTIAL Steven Panagos William B. Murphy Chief Restructuring Officer Interim Chief Financial Officer The Perm Traffic Company The Perm Traffic Company 1200 State Fair Blvd 1200 State Fair Blvd Syracuse, New York 13209 Syracuse, New York 13209 cc: Robert Chapman Jim Demme Re: Amended Commitment Letter ------------------------- Gentlemen: You have advised General Electric Capital Corporation, as Agent ("GE CAPITAL": the term "GE Capital" shall include any affiliate of General Electric Capital Corporation designated by it to provide all or any portion of the credit facility described herein) and Kimco Realty Corporation, as Agent under the Supplemental Real Estate Facility (as defined below) ("KIMCO" and, together with GE Capital, "AGENTS") that The Penn Traffic Company, a Delaware corporation ("PENN TRAFFIC"). Penny Curtiss Baking Company, Inc., a New York corporation ("PENNY CURTISS"). and Big M Supermarkets, a New York corporation ("BIG M" and, together with Penn Traffic and Penny Curtiss, the "BORROWERS"), as the reorganized debtors under that certain First Amended Joint Plan of Reorganization of the Penn Traffic Company and Its Affiliated Debtors and Debtors in Possession Under Chapter 11 of the Bankruptcy Code, dated December 23, 2004 (as modified, amended and restated, the "Plan of Reorganization") to be confirmed in a jointly administered case, Case No. 03-22945 (ASH) (the "BANKRUPTCY CASE"), commenced under Chapter 11 of title 11 of the United States Code (the "BANKRUPTCY CODE") in the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"), arc seeking up to $179,000,000 of financing (the "FINANCING" or the "TRANSACTION") in connection with the consummation of the Plan of Reorganization. You have asked that the Financing include: (a) a Senior Secured Revolving Credit Facility in an amount not to exceed $145,000,000 (the "REVOLVER") and a Senior Secured Term Loan in an amount not to exceed $6,000,000 (the "TERM LOAN" and, together with the Revolver, the "SENIOR FINANCING") and (b) a Supplemental Real Estate Facility in an amount not to exceed $28,000,000 (the "SUPPLEMENTAL REAL ESTATE FACILITY"). Based on our understanding of the Transaction as described above and the information which you have provided to us to date, (a) GE Capital is pleased to offer its commitment to provide the Senior Financing as described in this Commitment Letter in an amount not to exceed $151,000,000, and (b) Kimco is pleased to offer its commitment to provide the Supplemental Real Estate Facility in an amount not to exceed $28,000,000 as described in this Commitment Letter, in each case, subject to the following terms and conditions and to the consummation of the Financing by each other. The Senior Financing will be provided by GE Capital and Kimco will have no commitment in respect thereof. The Supplemental Real Estate Facility will be provided by Kimco and GE Capital will have no commitment in respect thereof. The commitments of GE Capital and Kimco hereunder are several and not joint. BORROWERS: Penn Traffic, Penny Curtiss and Big M, in each case, as reorganized debtors under the Plan of Reorganization. GUARANTORS: Sunrise Properties, Inc., Pennway Express, Inc., Commander Foods, Inc., P&C Food Markets, Inc. of Vermont, P.T. Development LLC and PT Fayetteville/Utica, LLC ("PT FAYCTTEVILLE"). ADMINISTRATIVE AGENT UNDER SENIOR FINANCING: GE Capital. ADMINISTRATIVE AGENT UNDER SUPPLEMENTAL REAL ESTATE FACILITY: Kimco. LEAD ARRANGER UNDER SENIOR FINANCING: GECC Capital Markets Group, Inc. ("GECMG") SUMMARY OF PROPOSED TERMS FOR THE REVOLVER: REVOLVER LENDERS: GE Capital and other lenders acceptable to GE Capital. MAXIMUM AMOUNT: $145,000,000 (including a Letter of Credit Subfacility in an amount not to exceed $75,000,000). Letters of Credit will be issued by GE Capital and/or one of its affiliates, on terms acceptable to GE Capital, and will be guaranteed or otherwise backed by the Revolver Lenders. GE Capital's Revolver commitment may also include a swing line subfacility of up to $15,000,000 ("SWING LINE LOAN"). TERM: 36 months. REVOLVER AVAILABILITY: Sum of (i) 85% on Borrowers' eligible accounts receivable (including credit card accounts receivable), plus (ii) the lesser of (a) 65% of Borrowers' eligible inventory valued at the lower of cost (FIFO) or market or (b) 85% of the net orderly liquidation value of Borrowers' eligible inventory, plus (iii) 80% of the net appraised value of Borrowers' eligible prescription files, plus (iv) 50% of the fair market value of Borrowers' and Guarantors' eligible owned real estate, plus (v) the lesser of (a) 50% of the net orderly liquidation value of Borrowers' eligible machinery and equipment and (b) $4,000,000 (the "BORROWING BASE"), in each case, less reserves established by GE Capital from time to time in its reasonable discretion. GE Capital will retain the right in its reasonable discretion from time to time to establish advance rates, standards of eligibility and reserves against Revolver Availability. The face amount of -2- all outstanding letters of credit under the Letter of Credit Subfacility will be reserved in full against Revolver Availability. In addition to any other reserves established by GE Capital, in the event the sum of the Borrowing Base and the Term Loan outstandings exceeds the sum of (i) 85% on Borrowers' eligible accounts receivable (including credit card accounts receivable), plus (ii) the lesser of (a) 72.5% of the book value of Borrowers' eligible inventory and (b) 92.5% of the net orderly liquidation value of such eligible inventory, plus (iii) 80% of the net appraised value of Borrowers' eligible prescription files, plus (iv) 50% of the fair market value of Borrowers' and Guarantors' eligible owned real estate, plus (v) the lesser of (a) 50% of the net orderly liquidation value of Borrowers' eligible machinery and equipment and (b) $4,000,000, the amount of such excess shall be reserved in full against the Revolver Availability. If Excess Revolver Availability (as defined below) is equal to or less than $26,000,000, further advances under the Revolver will not be available until the Supplemental Real Estate Facility has been fully funded; PROVIDED that, during the 6 month period immediately following the Closing Date, advances in excess of $10,000,000 of the outstanding term loan under the Supplemental Real Estate Facility will be available thereunder on a revolving basis and shall be applied to repay the outstanding Revolver and Swing Line Loan in an amount necessary to maintain Excess Revolver Availability above $26,000,000 (the "SREF REVOLVING LOANS'"). Notwithstanding anything in this Commitment Letter to the contrary, Borrowers may repay, without premium or penalty, the SREF Revolving Loans (which such amount may subsequently be reborrowed pursuant to the proviso contained in the immediately preceding sentence), PROVIDED that (i) no default or event of default shall have occurred and be continuing prior to, and after giving effect to, such repayment, (ii) the amount so repaid shall not exceed the amount by which the Borrowers have reduced during such 6 month period the aggregate face amount of all letters of credit outstanding under the Letter of Credit Subfacility as of the Closing Date, (iii) after giving effect to such repayment, the outstanding term loan under the Supplemental Real Estate Facility shall equal at least $10,000,000, and (iv) after giving effect to such repayment, Excess Revolver Availability is equal to at least $28,000,000. "EXCESS REVOLVER AVAILABILITY" shall mean, as of any date of determination, the lesser of (i) the Maximum Amount and (ii) the Borrowing Base, in each case LESS the sum of the aggregate Revolver and Swing Line Loan then outstanding. -3- SUMMARY OF PROPOSED TERMS FOR THE TERM LOAN TERM LOAN LENDERS: GE Capital and other lenders acceptable to GE Capital. AMOUNT: $6,000,000 to be advanced on the date the Senior Financing is consummated (the "CLOSING DATE"). TERM: 36 months. If the Revolver is terminated, the Term Loan will immediately become due and payable in full. AMORTIZATION: Bullet payment at maturity. SUMMARY OF PROPOSED TERMS FOR THE SUPPLEMENTAL REAL ESTATE FACILITY SUPPLEMENTAL REAL ESTATE FACILITY LENDERS: Kimco and other lenders acceptable to Kimco and GE Capital. AMOUNT: Other than the SREF Revolving Loans, the Supplemental Real Estate Facility shall consist of term loans which will be available on a multi-draw basis in the aggregate amount of $28,000,000; $10,000,000 to be funded on the Closing Date and $18,000,000 to be funded at Borrowers' election. However, when Excess Revolver Availability is equal to or less than $26,000,000, funding will be required in increments of at least $5,000,000 (other than the SREF Revolving Loans, which advances will be required in increments of at least $1,000,000) or, if the balance available to be drawn is less than $5,000,000, then such lesser amount. Other than the SREF Revolving Loans, once funded, drawings under the Supplemental Real Estate Facility which are repaid may not be reborrowed. SUPPLEMENTAL REAL ESTATE FACILITY AVAILABILITY $28,000,000. TERM: 36 months. If the Revolver is terminated, the Supplemental Real Estate Facility will immediately become due and payable in full. AMORTIZATION: Bullet payment at maturity. TERMS OF GENERAL APPLICABILITY -4- USE OF PROCEEDS: Loans made on the Closing Date will be used to refinance Borrowers' existing debtor in possession facility on the effective date (the "EFFECTIVE DATE") of the Plan of Reorganization and to otherwise enable Borrowers to substantially consummate the Plan of Reorganization, and to fund certain fees and expenses associated with the Financing. Loans made after the Closing Date will be used for Borrowers' working capital purposes. INTEREST: RALES: At Borrowers' option, the Revolver will bear interest at either (i) absent a default, 1, 2 or 3-month reserve-adjusted London Interbank Offered Rate ("LIBOR") plus the Applicable Margin(s) or (ii) floating at the Index Rate (higher of Prime or 50 basis points over Fed Funds) plus the Applicable Margin(s). The Supplemental Real Estate Facility will bear interest at the Index Rate (higher of Prime or 50 basis points over Fed Funds) plus the Applicable Margin. PAYMENT DATES: Interest will be payable monthly in arrears for Index Rate loans and at the expiration of each LIBOR period for LIBOR loans. OTHER TERMS: All interest will be calculated based on a 360-day year and actual days elapsed. The Financing documentation will contain (a) LIBOR breakage provisions and LIBOR borrowing mechanics, (b) LIBOR definitions, and (c) the Index Rate definition will equal the higher of the prime rate as reported by THE WALL STREET JOURNAL or the overnight Federal funds rate plus 50 basis points. APPLICABLE MARGINS The following Applicable Margins and the Applicable Unused Facility Fee (consisting of per annum rate margins) shall apply until the adjusted as described below: Applicable Revolver Index Margin 1.00% Applicable Revolver LIBOR Margin 2.00%(a) Applicable Term Loan Index Margin 5.00% Applicable Supplemental Real Estate Facility Index Margin 5.50%* Applicable Unused Facility Fee 0.375% (a) Initial margin assumes financing closes at Level I on Schedule II. * Overall interest rate floor of 10.00% Starting with the first day of the month beginning after the first full month after Closing Date, until the first full quarter after closing as described in the following paragraph, the Revolver Applicable Margins and the Applicable Unused Facility Fee -5- shall be subject to adjustment (up or down) prospectively, based on Borrowers' average daily Excess Revolver Availability and daily unfunded portion of the Supplemental Real Estate Facility (collectively, "Excess Availability") for the month most recently ended in accordance with the grid attached as Schedule II. Beginning with the quarter after the first full quarter after closing, adjustments in the Applicable Margins and the Applicable Unused Facility Fee will be implemented quarterly, on a prospective basis, on the first day of the second month of such quarter evidencing the need for such adjustment based on the average Excess Availability for the previous quarter. FEES: In addition to the fees payable to GE Capital and Kimco as specified in the fee letter among Borrowers, GE Capital and Kimco, dated January 5,2005 (the "FEE LETTER"), the following fees will be payable under the Financing documentation: LETTER OF CREDIT FEE: Letter of Credit Fee equal to the Applicable Revolver LIBOR Margin minus 0.25% per annum (calculated on the basis of a 360-day year and actual days elapsed) on the face amount of the letters of credit, payable monthly in arrears, plus all reasonable and customary costs and expenses incurred by GE Capital in connection with the issuance or guaranty of Letters of Credit. UNUSED FACILITY FEE: Unused Facility Fee equal to the Applicable Unused Facility Fee (calculated on the basis of a 360-day year and actual days elapsed) on the average unused daily balance of the Revolver payable monthly in arrears. UNUSED SUPPLEMENTAL REAL Unused Supplemental Real Estate Facility ESTATE FACILITY FEE: Fee equal to three percent (3.00%) per annum (calculated on the basis of a 360-day year and actual days elapsed) on the average unused daily balance of the Supplemental Real Estate Facility payable monthly in arrears. PREPAYMENTS: The Term Loan or funded outstanding loans under the Supplemental Real Estate Facility may be prepaid, in whole or in part; PROVIDED that no such prepayment of the Term Loan shall be permitted until all outstanding loans under the Supplemental Real Estate Facility have been paid in full and the Supplemental Real Estate Facility has been terminated; PROVIDED, FURTHER, that no such prepayment shall be permitted on either loan unless (i) both before and after giving effect to such prepayment no default or event of default has occurred and is continuing, (ii) both before and after giving effect to such prepayment Borrowers have a minimum Excess Revolver Availability of at least $65,000,000 for 30 consecutive days ("PREPAYMENT CONDITION"): and, PROVIDED, FURTHER, that a -6- prepayment premium (as described in the Fee Letter) shall be payable in the event that Borrowers prepay any portion of the Term Loan or loans under the Supplemental Real Estate Facility prior to the second anniversary of the Closing Date (other than prepayments of the SREF Revolving Loans). DEFAULT RATES: From and after the occurrence of a default, the interest rates applicable to all loans and the Letter of Credit Fee will be increased by two percent (2.00%) per annum over the interest rate or Letter of Credit Fee otherwise applicable and such interest and fees will be payable on demand. SECURITY: The Revolver and the Term Loan shall be perfected by a fully perfected first priority security interest in all or substantially all of the existing and after acquired real and personal, tangible and intangible assets of Borrowers and their subsidiaries, if any, including, without limitation, all cash, cash equivalents, bank accounts, accounts, other receivables, chattel paper, contract rights, inventory (wherever located), instruments, documents, securities (whether or not marketable), equipment, fixtures, real property interests, franchise rights, patents, trade names, trademarks, copyrights, intellectual property, general intangibles, investment property, supporting obligations, letter of credit rights, commercial tort claims, causes of action and all substitutions, accessions and proceeds of the foregoing (including insurance proceeds) (collectively, the "COLLATERAL"), EXCEPT that such security interest shall be subordinate to that of the Supplemental Real Estate Facility with respect to all leasehold interests (the "SUPPLEMENTAL LOAN PRIORITY COLLATERAL"). The Supplemental Real Estate Facility shall be perfected by a fully perfected first priority security interest in the Supplemental Loan Priority Collateral and a second priority security interest in all other Collateral. All Collateral shall be free and clear of other liens, claims and encumbrances, EXCEPT permitted liens and encumbrances acceptable to Agents. All of the Supplemental Loan Priority Collateral shall be free and clear of other liens, claims and encumbrances, EXCEPT permitted liens and encumbrances acceptable to Kimco. Permitted liens may include deeply subordinated liens in favor of trade creditors on terms acceptable to Agents. Each Guarantor shall guarantee the obligations of each Borrower under the Financing documentation, and Agents, as applicable, shall receive a security interest in all of the assets of such Guarantor. Each Borrower will pledge all of the issued and outstanding capital stock of its subsidiaries (including without limitation -7- Penny Curtiss and Big M) to Agents. All obligations of each Borrower shall be cross-defaulted to each other Borrower and to all other material indebtedness of each Borrower and any of its subsidiaries. All such obligations shall be cross-collateralized with each other and cross-collateralized and guaranteed by any and all subsidiaries of Borrowers. The repayment right (including without limitation payments from proceeds of the Collateral) of the Term Loan Lenders shall rank second in priority to the repayment right of each of the Revolver Lenders (the Revolver Lenders together with the Term Loan Lenders and the Supplemental Real Estate Facility Lenders, the "LENDERS"). The repayment right (including without limitation payments from proceeds of the Collateral) of the Supplemental Real Estate Facility Lenders shall rank last in priority to the repayment right of each of the Revolver Lenders and Term Loan Lenders, except with respect to the Supplemental Loan Priority Collateral. Upon a disposition (including without limitation a sale of an operating business or division) of Collateral which includes both Supplemental Loan Priority Collateral and other Collateral which may be permitted under the definitive loan documentation, proceeds will be allocated and distributed to the Lenders in accordance with the relative priorities of the Lenders' liens on and security interests in the Collateral subject to such disposition, all to be more fully set forth in the final intercreditor agreement to be agreed upon. GE Capital and Kimco are each authorized to prc-file financing statements and other evidences of liens with respect to all of the Collateral, including "ALL-ASSETS" filings, if applicable, naming GE Capital or Kimco, as the case may be, as secured party. FINANCIAL REPORTING: The Financing documentation will require Borrowers, on a monthly basis, to provide to Agents and the Lenders internally prepared financial statements. Annually, Borrowers will be required to provide audited financial statements and a board approved operating plan for the subsequent year. Borrowers will provide weekly Borrowing Base Certificates and other information reasonably requested by Agents. All financial statements shall be prepared on a consolidated basis. DOCUMENTATION: The Financing documentation will contain representations and warranties; conditions precedent; affirmative, negative and financial covenants; indemnities; events of default and remedies as reasonably required by Agents. Relevant documents, such as Transaction documents, subordination agreements and intercreditor agreements, equity or stockholder -8- agreements, incentive and employment agreements, tax agreements, and other material agreements, all to be acceptable to Agents. Senior Financing documentation will be separate from the Supplemental Real Estate Facility documentation and the documentation for each will be substantially similar. SYNDICATION: Upon acceptance of this letter, GECMG may initiate discussions with potential lenders relating to the syndication of the Revolver, and Kimco may initiate discussions with potential lenders regarding their syndication of the Supplemental Real Estate Facility. It is expressly understood by Borrowers that GE Capital through GECMG intends to syndicate the Revolver to allow GE Capital to sell down the Revolver to a desired hold position; PROVIDED that any new investor in the Revolver shall hold not less than $5,000,000 thereof. Borrowers will agree to a syndication timetable that allows for the primary syndication of the Financing prior to the Closing Date, but the success of the syndication will not be a condition precedent to the closing of the Financing. GECMG and Kimco, as applicable, shall syndicate the transaction with the assistance of Borrowers. Such assistance shall include, but not be limited to: (i) prompt assistance in the preparation of an Information Memorandum and verification of the completeness and accuracy of the information contained therein; (ii) preparation of offering materials and projections by Borrowers and their advisors taking into account the proposed Transaction; (iii) providing GECMG or Kimco, as applicable, with all information reasonably deemed necessary by GECMG or Kimco, as applicable, to successfully complete the syndication; (iv) confirmation as to the accuracy and completeness of such offering materials, information and projections; (v) participation of Borrowers' senior management in meetings and conference calls with potential lenders at such times and places as GECMG or Kimco, as applicable, may reasonably request; and (vi) using reasonable best efforts to ensure that the syndication efforts benefit from Borrowers' existing lending relationships. GECMG or Kimco, as applicable, may provide to industry trade organizations information with respect to the Financing that is necessary and customary for inclusion in league table measurements. OTHER TERMS AND CONDITIONS: Agents' commitments with respect to the Financing are conditioned upon satisfaction of the following conditions as of the Closing Date, and the Financing documents will require, among other things, compliance with covenants pertaining to -9- the following (all in form and substance satisfactory to Agents): o The terms of each of (i) the Plan of Reorganization and (ii) all orders of the Bankruptcy Court confirming, approving, implementing or affecting the Plan of Reorganization, this Commitment Letter and the Financing, or affecting the rights, remedies and obligations of GE Capital, Kimco and Lenders hereunder and thereunder, shall be in form and substance reasonably acceptable to Agents and Lenders in their sole discretion. o The Plan of Reorganization shall have been confirmed by a final order entered by the Bankruptcy Court (the "CONFIRMATION ORDER"), in form and substance reasonably acceptable to Agents and Lenders in their sole discretion, which has not been stayed by the Bankruptcy Court or any other court having jurisdiction to issue any such stay. The Confirmation Order shall have been entered upon proper notice to all parties to be bound by the Plan of Reorganization, all as may be required by the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and any applicable local bankruptcy rules. Moreover, (i) the time to appeal the Confirmation Order or to seek review, rehearing or certiorari with respect to the Confirmation Order must have expired, (ii) no appeal, stay, or petition for review, rehearing or certiorari with respect to the Confirmation Order may be pending and (iii) the Confirmation Order must otherwise be in full force and effect. o A sale and leaseback of Penn Traffic's five distribution warehouses shall occur on, or prior to, Closing Date with net proceeds amount, terms of sale and leases to be reasonably acceptable to the Agents; PROVIDED that, unless either Agent has notified Penn Traffic to the contrary within ten days of the execution and delivery of the Original Commitment Letter (as defined below), then the terms and conditions of the sale and leases of the five distribution warehouses and the net proceeds amount thereof, in each case as set forth in the executed definitive documentation related thereto (copies of which have been delivered to the Agents prior to the date hereof), shall be deemed reasonably acceptable to the Agents. o All conditions to the effectiveness of the Plan of Reorganization shall have been satisfied or waived in a manner reasonably acceptable to Agents and Lenders. o Acceptable documentation of the Senior Financing and of the Supplemental Real Estate Facility or other credit facility acceptable to GE Capital, the Revolver Lenders and the Term Loan Lenders. Without limiting the foregoing, - 10- Agents shall have entered into an acceptable intercreditor agreement. Cash management systems for Borrowers acceptable to GE Capital. GE Capital will have acceptable cash dominion by means of lock boxes and blocked account agreements reasonably satisfactory to Agents. Commercially reasonable insurance protection for Borrowers' industry, size and risk and Agents' collateral protection (terms, underwriter, scope, and coverage to be acceptable to Agents); Agents named as loss payees (property/casualty) and additional insureds (liability); and non-renewal/cancellation/amendment riders to provide 30 days advance notice to Agents. Satisfactory compliance with applicable laws, decrees, and material agreements or obtaining of applicable consents and waivers. General and collateral releases from prior senior lenders, customary corporate and estoppel certificates; and consignment or similar filings. Limitations on commercial transactions, management agreements, service agreements, and borrowing transactions between Borrowers and Guarantors and their officers, directors, employees and affiliates. Limitations on, or prohibitions of, cash dividends, other distributions to equity holders, payments in respect of subordinated debt, payment of management fees to affiliates and redemption of common or preferred stock. Restrictions on mergers, acquisitions or sale of any Borrower or Guarantor, its stock or a material portion of its assets. Prohibitions of a direct or indirect change in control of any Borrower or Guarantor. Landlord/mortgagee^ailee waivers reasonably satisfactory to GE Capital and Kimco (in the case of landlord waivers), as applicable. Financial covenants to include minimum EBITDA, leverage ratio, fixed charge coverage ratio and maximum capital expenditures to be tested monthly on a twelvemonth rolling basis (with a cumulative buildup during the first year after closing) when Excess Availability is less - 11- than $35,000,000. o Agents' and Lenders' rights of inspection, access to facilities, management and auditors. o Customary yield protection provisions, including, without limitation, provisions as to capital adequacy, illegality, changes in circumstances and withholding taxes. o Environmental surveys or reviews with respect to all fee owned properties in scope and form, by firms, and with results acceptable to Agents, as applicable. o Lender syndication/assignment rights. o Governing law: New York, o Completion by Agents of all business and legal due diligence with results satisfactory to Agents. Without limiting the foregoing, the corporate structure, capital structure, business plan, financial projections, other debt instruments, material contracts, and governing documents of each Borrower and its affiliates, and tax and legal effects resulting from the Transaction, must be acceptable to Agents. o If requested, satisfactory evidence of solvency of each Borrower and Guarantor after giving effect to the Transaction. o Minimum Excess Availability for Borrowers in the aggregate at closing (on a pro forma basis with all disbursements under the plan of reorganization either paid or reserved (other than the portion of Kroll Zolfo Cooper's success fee which remains unpaid on the Closing Date (which unpaid portion shall not exceed 50% of such total fee)), trade payables being paid currently, expenses and liabilities being paid in the ordinary course of business and without acceleration of sales and without deterioration of working capital and without giving effect to any reserves against availability which might be reasonably required by the Agents based on information reviewed after the date hereof) of at least $41,500,000, PROVIDED that Excess Revolver Availability for Borrowers in the aggregate at closing is at least $29,000,000 (collectively, the "MINIMUM EXCESS AVAILABILITY CLOSING CONDITION"). o With respect to any owned real estate collateral, receipt of real property surveys, title commitments, title insurance policies in amount, form and from, as applicable, an issuer satisfactory to Agents. The Borrowers represent and -12- warrant to GE Capital and Kimco that the Borrowers and the Guarantors own and/or lease the real property set forth on SCHEDULE I attached hereto, and will continue to own and operate each such property as a supermarket consistent with current practices. o Receipt of all necessary or appropriate third party and governmental waivers and consents. o Satisfactory opinions of counsel from Borrowers' counsel (including local counsel as requested) reasonably acceptable to Agents. o Receipt of appraisals satisfactory to Agents of Borrowers' inventory, machinery and equipment, vehicles and real estate performed by appraisers retained by Borrowers and acceptable to Agents, with acceptable reliance letters in favor of Agents. Appraisals of real estate, vehicles, prescription lists, machinery and equipment must be dated within seven months of Closing Date, and appraisals of inventory must be dated within three months of Closing Date. o The status of the pending litigation relating to the real property owned by Perm Traffic and located adjacent to New York State Route 5 in the Town of Manlius, County Onondaga State of New York, which such property is identified as Store Number 3141 on Schedule I hereto shall be satisfactory to the Agents in their sole discretion (the "FAYETTEVILLE CLOSING CONDITION"). o As of the Closing Date, there will have been (i) since the Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code with Respect to the First Amended Joint Plan of Reorganization of The Perm Traffic Company and its Affiliated Debtors and Debtors in Possession Under Chapter 11 of the Bankruptcy Code, dated December 23, 2004 (as amended, supplemented, restated and/or modified, the "DISCLOSURE STATEMENT"), no material adverse change, individually or in the aggregate, in the business, financial or other condition of Borrowers and IT Fayettcville (considered as a whole), or the collateral which will be subject to the security interest granted to Agents and Lenders or in the prospects or projections of the Borrowers and PT Fayetteville (considered as a whole), (ii) no litigation commenced which, if successful, would have a material adverse impact on the Borrowers and PT Fayetteville (considered as a whole), their business, or their ability to repay the loans, or which would challenge the transactions under consideration, and (iii) since the Disclosure Statement, no material increase in the liabilities, -13- liquidated or contingent, of the Borrowers and PT Fayettcville (considered as a whole), or a material decrease in the assets of the Borrowers and PT Fayetteville (considered as a whole) (collectively, the "MAC CLOSING CONDITION"). For the avoidance of doubt, the Borrowers' failure to satisfy the Fayetteville Closing Condition shall not in addition constitute a failure to satisfy the MAC Closing Condition. GE Capital's commitment hereunder is subject to the execution and delivery of final legal documentation acceptable to GE Capital and its counsel incorporating, without limitation, the terms set forth in this Commitment Letter. Kimco's commitment hereunder is subject to the execution and delivery of final legal documentation acceptable to Kimco and its counsel incorporating, without limitation, the terms set forth in this Commitment Letter. You agree that GECMG and Kimco will act as the sole syndication agents for the loans and that no additional agents, co-agents or arrangers will be appointed, or other titles conferred, without GECMG's consent. You agree that no Lender will receive any compensation of any kind for its participation in the Financing, EXCEPT as expressly provided for in this letter or the Fee Letter. To ensure an orderly and effective syndication of the Financing, you agree that until the termination of the syndications, as determined by GECMG or Kimco, as applicable, you will not, and will not permit any of your affiliates to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication of or issuance of, or engage in discussions concerning the syndication of or issuance of, any debt facility or debt security (including any renewals thereof), without the prior written consent of GECMG or Kimco, as applicable. By signing this Commitment Letter, each party acknowledges that this Commitment Letter supersedes any and all discussions and understandings, written or oral, between and among GE Capital, Kimco and any other person as to the subject matter hereof, including, without limitation, any prior commitment letters (including that certain Commitment Letter, dated January 5, 2005, by and among GE Capital, Kimco and the Borrowers (the "ORIGINAL COMMITMENT LETTER")) and the letter of interest dated June 16, 2004 between GE Capital Commercial Finance, Inc. and Penn Traffic (collectively, the "PRIOR LETTER") other than the Fee Letter and the Work Fee Letter (as defined in the Fee Letter). No amendments, waivers or modifications of this Commitment Letter or any of its contents shall be effective unless expressly set forth in writing and executed by Borrowers and Agents. This Commitment Letter is being provided to you on the condition that, EXCEPT as required by law, neither it, the Fee Letter, the Prior Letter, nor their contents will be disclosed publicly or privately except to those individuals who are your officers, employees or advisors who have a need to know of them as a result of their being specifically involved in the Transaction under consideration and then only on the condition that such matters may not, EXCEPT as required by law or as may be required to obtain the Bankruptcy Court approval as set forth below, be further disclosed. No person, other than the parties signatory hereto, is entitled to rely upon this Commitment Letter or any of its contents. No person shall, EXCEPT as required by law, use the name of, or refer to, GE Capital or Kimco, or their respective affiliates, in any correspondence, discussions, press release, advertisement or disclosure made in connection with the Transaction without the prior written consent of GE Capital or Kimco, as applicable. Regardless of whether the commitment herein is terminated or the Transaction closes, each Borrower agrees to pay upon demand to GE Capital or Kimco, as applicable, all reasonable out-of-pocket expenses, including, all reasonable legal, environmental, and other reasonable consultant costs and fees incurred in -14- the preparation of this Commitment Letter, the Fee Letter, the Prior Letter, and a field examination fee of $800 per person per diem plus actual out-of-pocket expenses in connection with the conduct of the field audit and documentation of the Financing (the "Transaction Expenses") which may be incurred by GE Capital, GECMG or Kimco in connection with the Transaction. Each Borrower's reimbursement obligation hereunder shall apply whether or not the Financing closes. Regardless of whether the commitment herein is terminated or the Financing closes, each Borrower shall indemnify and hold harmless each of GE Capital, GECMG, Kimco, the Lenders, their respective affiliates, and the directors, officers, employees, agents, attorneys and representatives of any of them (each, an "Indemnified Person"), from and against all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including, but not limited to, reasonable attorneys' fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal), which may be instituted or asserted against or incurred by any such Indemnified Person in connection with, or arising out of, this Commitment Letter, the Fee Letter, the Prior Letter, the Financing under consideration, the documentation related thereto, any other financing related thereto, any actions or failures to act in connection therewith, and any and all environmental liabilities and reasonable legal costs and expenses arising out of or incurred in connection with any dispute between or among any party to any of the foregoing, and any investigation, litigation, or proceeding related to any such matter. Notwithstanding the preceding sentence, indemnitors shall not be liable for any indemnification to an Indemnified Person to the extent that any such suit, action, proceeding, claim, damage, loss, liability or expense results solely from that Indemnified Person's gross negligence, willful misconduct or breach of its obligations hereunder, as finally determined by a court of competent jurisdiction. Under no circumstances shall GE Capital, GECMG, Kimco or any Lender, or any of their respective affiliates be liable to you or any other person for any punitive, exemplary, consequential or indirect damages which may be alleged in connection with this Commitment Letter, the Fee Letter, the Prior Letter, the Transaction, the documentation related thereto or any other financing, regardless of whether the commitment herein is terminated or the Financing closes. Furthermore, the liability of GE Capital, Kimco, GECMG or any other Lender or any of their respective affiliates which may be alleged in connection with this Commitment Letter, the Fee Letter, the Prior Letter, the Transaction, the documentation related thereto or any other financing shall be limited to the amount of Commitment Fees actually paid by the Borrowers pursuant to the Fee Letter. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS COMMITMENT LETTER, THE FEE LETTER, THE PRIOR LETTER, ANY TRANSACTION RELATING HERETO OR THERETO, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. Except to the extent the Bankruptcy Court has jurisdiction, each party hereto consents and agrees that the state or federal courts located in New York County, City of New York, New York shall have exclusive jurisdiction to hear and determine any claims or disputes between or among any of the parties hereto pertaining to this Commitment Letter, the Fee Letter, the Prior Letter or the Transaction under consideration, and any investigation, litigation, or proceeding related to or arising out of any such matters, PROVIDED, that, the parties hereto acknowledge that any appeals from those courts may have to be heard by a court (including an appellate court) located outside of such Jurisdiction. Each party hereto expressly submits and consents in advance to such Jurisdiction in any action or suit commenced in any such court, and hereby waives any objection, which such party may have based upon lack of personal jurisdiction, improper venue or inconvenient forum. This Commitment Letter is governed by and shall be construed in accordance with the laws of the State of New York applicable to contracts made and performed in that state. - 15- GE Capital and Kimco shall have access to all relevant facilities, personnel and accountants, and copies of all documents which GE Capital or Kimco, as applicable, may request, including business plans, financial statements (actual and pro forma), books, records, and other documents of each credit party. This Commitment Letter shall be of no force and effect unless and until (a) this Commitment Letter and the Fee Letter are each executed and delivered to the undersigned on or before January 20, 2005, in the case of GE Capital at 201 Merritt 7, P.O. Box 5201, Norwalk, CT 06856-5201 and in the case of Kimco at 3333 New Hyde Park Road, New Hyde Park, NY 11042, and (b) on or prior to January 26, 2005, (i) the Bankruptcy Court shall have approved and entered an order in the Bankruptcy Case, in form and substance reasonably satisfactory to Agents, authorizing Borrowers' acceptance of, and performance under, this Commitment Letter and the Fee Letter, which order shall specifically provide that each Borrower is authorized to pay to Agents the fees and deposits referenced in the Fee Letter and to reimburse all reasonable costs and expenses incurred in connection with the Financing, and Agents' right to receive such reimbursements shall be entitled to priority as administrative expense claims under Section 503(b)(l) of the Bankruptcy Code, immediately upon demand by either Agent without any further order of the Bankruptcy Court or consent of any person, whether or not the Financing closes, and (ii) Borrowers shall have paid all fees and deposits then due and payable to Agents as provided in the Fee Letter. Once effective, Agents' commitment to provide financing in accordance with the terms of this Commitment Letter shall cease if the Transaction docs not close, or it is not funded for any reason, on or before March 31, 2005 and, notwithstanding any further discussions, negotiations or other actions taken after such date, neither Agents nor any of their respective affiliates shall have any liability to any person in connection with their refusal to fund the Financing or any portion thereof after such dale. We look forward to continuing to work with you toward completing this Transaction. Our business is helping yours. (remainder of page intentionally left blank] -16- PLAN SCHEDULE 5.8 ----------------- AGREEMENT FOR SALE AND LEASEBACK By and Between THE PENN TRAFFIC COMPANY, a Delaware corporation, as Seller and EQUITY INDUSTRIAL PARTNERS CORP., a Massachusetts corporation, as Buyer ___________________ Premises: Jamestown DC Property Syracuse 1 DC Property Syracuse 2 DC Property DuBois 1 DC Property DuBois 2 DC Property Table of Contents Page ---- ARTICLE 1 Sale and Leaseback...................................................1 1.1 Sale...........................................................1 1.2 Certain Definitions............................................2 1.3 Leaseback......................................................6 1.4 Access to Premises.............................................6 ARTICLE 2 Purchase Price.......................................................7 2.1 Purchase Price.................................................7 2.2 Personal Property..............................................7 2.3 Escrow.........................................................7 ARTICLE 3 Title To Real Property...............................................9 3.1 Title..........................................................9 3.2 Acceptance of Deeds Full Performance; Survival.................9 3.3 Title Defects Affecting the Premises...........................9 3.4 Waiver by Buyer...............................................10 ARTICLE 4 Operation of the Premises Pending the Closing.......................10 4.1 Continuing Operations.........................................10 4.2 Leases and Other Agreements...................................10 4.3 Encumbrances..................................................11 ARTICLE 5 Conditions to Closing...............................................11 5.1 Buyer's Conditions to Closing.................................11 5.2 Seller's Conditions to Closing................................12 ARTICLE 6 Closing and Recording...............................................12 6.1 Closing and Closing Date......................................12 6.2 Deliveries by Seller..........................................13 6.3 Deliveries by Buyer...........................................14 6.4 Prorations....................................................15 6.5 First Month's Rent............................................15 6.6 Costs and Expenses............................................15 6.7 Settlement Statement..........................................15 ARTICLE 7 Representations and Warranties of Seller............................16 7.1 Organization..................................................16 7.2 Authorization.................................................16 7.3 Litigation....................................................16 (i) 7.4 Compliance....................................................17 7.5 Foreign Person................................................17 7.6 Investment Company Act; Public Utility Holding Company Act....17 7.7 No Defaults...................................................17 7.8 Title to the Premises.........................................17 7.9 Service Contracts.............................................17 7.10 Condemnation..................................................17 7.11 Utilities and Public Access...................................17 7.12 Environmental Compliance......................................18 7.13 No Joint Assessment; Separate Lots............................19 7.14 Certificate of Occupancy......................................19 7.15 Survival of Representations and Warranties....................19 ARTICLE 8 Representations and Warranties of Buyer.............................19 8.1 Organization..................................................20 8.2 Authorization.................................................20 8.3 Litigation....................................................20 8.4 No Bankruptcy Filing..........................................20 8.5 Compliance with Anti-Terrorism Laws...........................20 8.6 Compliance with Anti-Money Laundering Measures................21 8.7 Survival of Representations and Warranties....................21 ARTICLE 9 Bankruptcy Covenants................................................21 9.1 Confirmation Order............................................21 ARTICLE 10 Casualty 21 10.1 Casualty......................................................21 ARTICLE 11 Condemnation.......................................................22 11.1 Condemnation..................................................22 ARTICLE 12 Remedies 23 12.1 Remedies......................................................23 ARTICLE 13 Dispute Resolution.................................................24 13.1 Bankruptcy Court Jurisdiction; Arbitration....................24 13.2 Waiver of Jury Trial..........................................25 ARTICLE 14 Miscellaneous......................................................25 14.1 Notices.......................................................25 14.2 Brokers and Finders...........................................26 14.3 Successors and Assigns........................................27 14.4 Amendments....................................................27 (ii) 14.5 Continuation and Survival of Indemnities, Representations and Warranties..............................................27 14.6 Interpretation................................................27 14.7 Governing Law.................................................27 14.8 Merger of Prior Agreements....................................27 14.9 Attorneys' Fees...............................................28 14.10 Relationship..................................................28 14.11 Authority.....................................................28 14.12 Counterparts..................................................28 14.13 Exhibits......................................................28 (iii) Exhibit A Description of the Land Exhibit B Form of Assignment of Intangible Property Exhibit C Form of Lease Exhibit D Form of Non-Foreign Certificate Exhibit E Wiring Instructions Exhibit F Form of Memorandum of Lease Exhibit G Exceptions Exhibit H Service Contracts Exhibit I Acquisition Cost Exhibit J Permitted Encumbrances Exhibit K Surveys, Property Condition Assessment Reports and Phase I Environmental Reports (iv) AGREEMENT FOR SALE AND LEASEBACK THIS AGREEMENT FOR SALE AND LEASEBACK (this "Agreement") is made and entered into as of December 22, 2004 (the "Execution Date") by and between THE PENN TRAFFIC COMPANY, a Delaware corporation ("Seller"), and EQUITY INDUSTRIAL PARTNERS CORP., a Massachusetts corporation ("Buyer"). R E C I T A L S A. WHEREAS, Seller has filed a voluntary petition for relief in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") pursuant to chapter 11 of title 11 of the United States Code, 11 U.S.C. ss.ss. 101, et seq. (the "Bankruptcy Code") (the "Bankruptcy Case"); B. WHEREAS, Seller owns certain real property more particularly described in Exhibit A, Seller desires to sell to Buyer, and Seller desires to lease back from Buyer, such real property; C. WHEREAS, Buyer is willing to purchase the premises identified in this Agreement and to lease it back to Seller on the terms and subject to the conditions set forth in this Agreement; D. WHEREAS, on August 20, 2004, Seller and its affiliated debtors and debtors in possession filed the Joint Plan of Reorganization of the Penn Traffic Company and Its Affiliated Debtors and Debtors in Possession Under Chapter 11 of the Bankruptcy Code and an accompanying disclosure statement with the Bankruptcy Court (the "Plan and Disclosure Statement"); and E. WHEREAS, Seller intends to (i) amend the Plan and Disclosure Statement to provide for the approval and consummation of the transactions contemplated in this Agreement (respectively, the "Amended Plan" and the "Amended Disclosure Statement") and (ii) seek an order at the hearing before the Bankruptcy Court to confirm the Amended Plan (the "Confirmation Hearing") approving, inter alia, entry into this Agreement and consummation of the transactions contemplated in this Agreement (the "Confirmation Order"). NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller and Buyer agree as follows: ARTICLE 1 SALE AND LEASEBACK 1.1 Sale. Seller hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms and conditions set forth herein, the property described in Sections 1.1(a) through 1.1(c) below. 2 (a) Land. The parcels of real property more particularly described in Exhibit A (the "Land"), which, subject to the terms and conditions hereof, shall be conveyed to Buyer or to a Permitted Designee at the Closing described below by a special warranty deed (the "Deed"), and which includes, without limitation: (i) all rights, privileges, tenements, hereditaments, rights of way, easements, appendages, appurtenances, riparian or littoral rights, roads, streets, alleys, strips or gores of land adjoining, belonging or in any way appertaining to the Land; (ii) all right, title and interest of Seller in any award or awards pending or made after Closing by any municipal, county, state or federal authority to the present and all subsequent owners of the Land on account of such ownership; and (iii) all other right, title and interest, estate, claim or demand whatsoever of Seller, either at law or in equity, in and to the Land, including specifically, without limitation, all remainders and reversions thereto, but excluding any interests in escrow accounts and security deposits for utility services. (b) Improvements. All improvements located on the Land, including all buildings, structures, apparatus, fixtures, equipment and appliances owned by Seller which are permanently affixed to the Land, but specifically excluding Tenant's Equipment (as defined in the Lease) (all of which other than the Tenant's Equipment, are collectively referred to as the "Improvements"); and (c) Intangible Property. All of the interest of Seller in any intangible personal property owned by Seller now or on the Closing Date which relates to and is reasonably required for the ownership of the Land or Improvements (but excluding any intangible personal property which relates to operation of the business conducted by Seller on the Premises and any interests in escrow accounts and security deposits for utility services), including without limitation, building plans and specifications, licenses and entitlements relating to the Land or Improvements (e.g., certificates of occupancy), soil reports, claims and causes of action related to the Land or Improvements, surveys, maps, any and all warranties, guarantees, utility contracts, permits and other rights owned by Seller, if any, relating to the ownership of all or any part of the Premises ("Intangible Property"), all of which shall be transferred to Buyer at the Closing by an instrument in the form of Exhibit B (the "Assignment of Intangible Property"). 1.2 Certain Definitions. "Allocated Purchase Price" means, with respect to each Individual Property, the portion of the Purchase Price allocable to such Individual Property as set forth in Exhibit I. "Buyer's Closing Documents" means the documents listed in Section 6.3. "Buyer's Legal Requirements" means all statutes, laws, rules, orders, regulations, ordinances, judgments, orders, decrees and injunctions of Governmental Authorities affecting Buyer or Buyer's Closing Documents. "ECS" means Environmental Compliance Services, Inc. of Agawam, MA. 3 "Environmental Claim" means any written request for information by a Governmental Authority, or any written notice, notification, claim, administrative, regulatory or judicial action, suit, judgment, demand, decree or other written communication by any person or Governmental Authority requiring, alleging or asserting liability with respect to Buyer, or the Premises, whether for damages, contribution, indemnification, cost recovery, compensation, injunctive relief, investigatory, response, remedial or cleanup costs, damages to natural resources, personal injuries, fines or penalties arising out of, based on, resulting from or related to: (i) the presence, Use, Release or threatened Release of any Hazardous Substance originating at or from, or otherwise affecting the Premises or any part thereof; (ii) any fact, circumstance, condition or occurrence forming the basis of any violation, or alleged violation, of any Environmental Law by Seller or otherwise affecting the Premises or any part thereof; or (iii) any alleged injury or threat of injury to health, safety or the environment by Seller or otherwise affecting the Premises or any part thereof. "Environmental Law(s)" means any and all applicable federal, state and local laws, rules, regulations or ordinances, each as amended from time to time, any judicial or administrative orders, decrees, settlement agreements or judgments thereunder, and any Permits, approvals, licenses, registrations, filings and authorizations, in each case as in effect as of the relevant date, relating to the environment, health or safety, or the Release or threatened Release, or otherwise relating to the presence or Use of Hazardous Substances. "Environmental Report(s)" means Phase I and Property Condition Reports prepared by ECS and dated October 2004, as listed and described on Exhibit K. "Exceptions" means those matters described in Exhibit G. "Governmental Authority" means any national, federal, state, regional or local government, or any other political subdivision of any of the foregoing, in each case with jurisdiction over Seller, the Premises, or any person with jurisdiction over Seller, the Premises or exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Hazardous Substance" means: (i) any petroleum or petroleum products or waste oils, explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), lead in drinking water, and lead-based paint, the presence, generation, Use, transportation, storage or disposal of or exposure to which (x) is regulated or could lead to liability under any Environmental Law or (y) is subject to notice or reporting requirements under any Environmental Law, (ii) any chemicals or other materials or substances which are now or hereafter become defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants," "contaminants," "pollutants" or words of similar import under any Environmental Law or (iii) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. 4 "Individual Property" means each of the following described properties taken individually (hereinafter referred to individually as the "Jamestown DC Property", the "Syracuse 1 DC Property", the "Syracuse 2 DC Property", the "DuBois 1 DC Property", and the "DuBois 2 DC Property"), each of which premises shall include the Land, the Improvements and Intangible Property located thereon or therein and appertaining thereto. "Insurance Requirements" means all material terms of any insurance policy required pursuant to the Lease and all material regulations and any use or condition thereof, which may, at any time, be recommended by the Board of Fire Underwriters, if any, having jurisdiction over the Premises, or such other body exercising similar function. "Lease" means that certain Lease in the form of Exhibit C to be executed and delivered to the Closing demising the Premises to Seller. "Lender" means the lender, if any, providing first mortgage financing to Buyer from time to time. "Material Adverse Effect" means a material adverse effect upon (i) the business or the financial position or results of operation of Seller, (ii) the ability of Seller to perform, or of Buyer to enforce, any of Seller's Closing Documents or (iii) the value of the Premises or Buyer's ownership thereof. "Permits" means all licenses, registrations, permits, allocations, filings, authorizations, approvals and certificates used in connection with the ownership, operation, construction, renovation, use or occupancy of the Premises, including, without limitation, building permits, state health department licenses, food service licenses, and licenses to conduct business. "Permitted Encumbrances" means those encumbrances set forth in Exhibit J. "Premises" means, collectively, all of the Individual Properties. "Real Property" means, collectively, the Land and the Improvements. "Release" means any release, threatened release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment of Hazardous Substances, including, without limitation, the movement of Hazardous Substances through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "Seller's Closing Documents" means the documents listed in Section 6.2. "Seller's Legal Requirements" means all statutes, laws, rules, orders, regulations, ordinances, judgments, orders, decrees and injunctions of Governmental 5 Authorities affecting Seller, Seller's Closing Documents, the Premises or any part thereof, or the ownership, construction, use, alteration or operation thereof, or any part thereof, enacted or entered and in force as of the relevant date, and all Permits and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instrument, either of record or known to Seller, at any time in force affecting the Premises or any part thereof, including, without limitation, any which (i) may require repairs, modifications, or alterations in or to the Premises or any part thereof, or (ii) in any way limit the use and enjoyment thereof, and further including, without limitation, all Environmental Laws and the Americans with Disabilities Act, as they may be amended from time to time, together with all regulations promulgated pursuant thereto or in connection therewith. "SNDA" means a Subordination, Nondisturbance and Attornment Agreement to be dated as of the Closing Date, in the form attached to the Lease, and executed by Lender, Buyer and Seller with respect to the Lease. "Title Company" means First American Title Insurance Company, attention: William Homa and S.H. Spencer Compton. "Use" means, with respect to any Hazardous Substance, the generation, manufacture, processing, distribution, handling, use, treatment, recycling or storage of such Hazardous Substance or transportation to or from any Individual Property by any person of any Hazardous Substance. 28 Other Capitalized Terms. The following capitalized terms are defined in the following Articles of this Agreement: Term Article - ---- ------- AAA.....................................................................13.1(a) Access Period...............................................................1.4 Affected Premises..........................................................10.1 Agreement..............................................................Preamble Amended Disclosure Statement...........................................Recitals Amended Plan...........................................................Recitals Assignment of Intangible Property........................................1.1(c) Bankruptcy Case........................................................Recitals Bankruptcy Code........................................................Recitals Bankruptcy Court.......................................................Recitals Buyer..................................................................Preamble Claim...................................................................13.1(f) Closing Date.............................................................6.1(a) Closing..................................................................6.1(a) Confirmation Hearing...................................................Recitals Confirmation Order.....................................................Recitals Damaged Property...........................................................10.1 Deed.....................................................................1.1(a) Down Payment.............................................................2.1(a) 6 Escrow Agent.............................................................2.3(a) Execution Date.........................................................Preamble Improvements.............................................................1.1(b) Income...................................................................2.3(a) Intangible Property......................................................1.1(c) Keen.......................................................................14.2 Land.....................................................................1.1(a) Non-Foreign Certificate..................................................5.1(b) Permitted Designee.........................................................14.3 Plan and Disclosure Statement..........................................Recitals Purchase Price..............................................................2.1 Restoration Fund...........................................................10.1 Rules...................................................................13.1(a) Seller.................................................................Preamble Service Contracts...........................................................1.4 Stubblebine................................................................14.2 Study.......................................................................1.4 Taking.....................................................................11.1 1.3 Leaseback. Concurrently with consummation of the Closing, Buyer (as landlord) agrees to lease to Seller, and Seller (as tenant) agrees to lease from Buyer, the Premises, pursuant to the Lease. 1.4 Access to Premises. From the Execution Date to and including the earlier to occur of the Closing and the termination of this Agreement (such time period being referred to as the "Access Period"), Buyer has had and shall continue to have the right, at its own risk, cost and expense, in each case upon reasonable prior notice to Seller and with Seller having the right to have a representative present, to enter, or cause its agents or representatives to enter, upon the Premises for the purpose of making inspections, investigations and/or studies of the Premises, including engineering, environmental, soil and seismic tests (each, a "Study"), and examining the books and records of Seller relating to the Premises. During the Access Period, Seller has furnished or made available to, and shall continue to furnish and make available to, Buyer or Buyer's representatives copies of all cleaning, maintenance and other service contracts (the "Service Contracts") listed in Exhibit H annexed hereto or entered into, modified or extended pursuant to Article 4, and all current 2004 engineering and environmental reports, title documents, financial statements and other books and records in the possession of Seller (excluding any proprietary reports, documents or other materials of Seller). Buyer covenants and agrees to supply Seller with the results of any Study and copies of any report or document created in connection with any Study promptly after receipt thereof. During the course of any such entry Buyer shall not cause, and shall not suffer or permit to occur, any damage or injury to the Premises or any part thereof, and Buyer shall not, and shall not suffer or permit to occur, any material interference with the management or operation of the Premises. If as a result of any entry or activities conducted on the Premises by Buyer or any of its agents, contractors, consultants or other representatives (whether prior to or on or after the date of this Agreement) the Premises 7 sustain or sustained any damage or injury, Buyer shall pay to Seller on demand the cost of repairing all such damage and injury, which obligation shall survive the termination of this Agreement. In addition, Buyer shall indemnify Seller and its affiliates from and against all claims of third parties resulting from any such entry on the Premises by Buyer or any of its agents, contractors, consultants or other representatives, or any Study or other activities conducted in or on the Premises by them, or any of them, together with all expenses incurred by Seller or such affiliate by reason thereof including, without limitation, reasonable attorneys' fees and disbursements, which obligation shall survive the Closing or the termination of this Agreement. ARTICLE 2 PURCHASE PRICE 2.1 Purchase Price. The purchase price for the Premises shall be Thirty-Seven Million Dollars ($37,000,000) (the "Purchase Price"), subject to all adjustments and credits provided for in this Agreement, and shall be payable as follows: (a) the sum of One Million Dollars ($1,000,000) shall be payable by check of Buyer, subject to collection, drawn to the order of and delivered to Escrow Agent, or by wire transfer of immediately available federal funds to an account designated by Escrow Agent, simultaneously with the execution of this Agreement by Buyer (the "Down Payment"); and (b) the balance of the Purchase Price, to wit, Thirty-Six Million Dollars ($36,000,000), as the same may be adjusted pursuant to Article 10 or Article 11, shall be paid to Seller at the Closing, by federal funds wire transfer to Seller's bank account and/or, if Seller so elects, to the accounts of the holders of any mortgage liens encumbering the Premises, which account(s) shall be designated by Seller in writing at least one (1) business day prior to the Closing. 2.2 Personal Property. No portion of the Purchase Price shall be attributable to personal property. 2.3 Escrow. (a) First American Title Insurance Company ("Escrow Agent") shall hold the Down Payment in escrow in an interest-bearing bank account in an institution acceptable to Seller and Buyer, or in such other type or types of investments as may be agreed to in writing by Seller and Buyer, until the Closing or such other time as is specified below and shall pay over or apply the Down Payment in accordance with the terms of this Section 2.3. All interest or other income earned on the Down Payment (the "Income") shall be paid to or applied for the benefit of Buyer except as otherwise provided in Section 12.1 and the party receiving the Income or having the same applied to its benefit shall be responsible for paying any income taxes thereon. The tax identification numbers of the parties hereto shall be furnished to Escrow Agent upon request. 8 (b) If the Closing occurs, the Down Payment and the Income shall be paid by Escrow Agent to Seller and Buyer shall receive a credit against the remaining balance of the Purchase Price payable under Section 2.1(c) equal to the amount of the Income. If the Closing does not for any reason occur, the disposition of the Down Payment and the Income shall be governed by Section 12.1. (c) Escrow Agent shall not be required to make any disposition of the Down Payment and the Income unless (i) Escrow Agent is directed to do so in writing by Seller and Buyer or (ii) Escrow Agent is directed to do so in writing by the party which claims to be entitled to receive the Down Payment and the Income and the other party does not object to such disposition within ten (10) days after notice of such direction is given by Escrow Agent to such other party. The notice given by Escrow Agent pursuant to clause (ii) above shall state in capital letters that the failure of the addressee to object to the disposition of the Down Payment described in such notice within ten (10) days of the giving thereof shall constitute a waiver of the addressee's right to contest or object to such disposition. In the event that any dispute shall arise with respect to the entitlement of either party to the Down Payment and the Income, Escrow Agent shall continue to hold the Down Payment and the Income until otherwise directed by written instruction from Seller and Buyer or a final judgment of a court of competent jurisdiction entered in an action or proceeding in which Escrow Agent is a party. In addition, in the event of any such dispute, Escrow Agent shall have the right at any time to commence an action in interpleader and deposit the Down Payment and the Income with a court of competent jurisdiction located in Onodaga County, New York. Upon commencement of such action and the making of such deposit, Escrow Agent shall be released and discharged of and from all further obligations and responsibilities hereunder. For the purposes of this Section 2.3(c), no dispute shall be deemed to exist as to the disposition of the Down Payment and the Income if a party hereto objects to the disposition thereof set forth in a notice from Escrow Agent pursuant to clause (ii) above and such objection is made more than ten (10) days after the giving of such notice by Escrow Agent. (d) The parties hereto acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that Escrow Agent shall not be deemed to be the agent of any of the parties hereto and that Escrow Agent shall not be liable to either of the parties hereto for any act or omission on its part unless taken or suffered in bad faith, in willful disregard of this Agreement or involving gross negligence on the part of Escrow Agent. Escrow Agent may act upon any instrument or other writing and upon signatures believed by it to be genuine, without any duty of independent verification. Escrow Agent shall not be bound by any modification of this Agreement unless the same is in writing and signed by the parties hereto and a counterpart thereof is delivered to Escrow Agent and, if Escrow Agent's duties, rights or liabilities hereunder are affected, unless Escrow Agent shall have given its prior consent thereto in writing. Escrow Agent shall not be required or obligated to determine any questions or law or fact. The parties hereto shall jointly and severally indemnify and hold harmless Escrow Agent from and against all costs, claims and expenses, including reasonable attorneys' fees and litigation costs, incurred by Escrow Agent in connection with the performance of its duties hereunder (including, without limitation, in an 9 interpleader action or other litigation relative to the disposition of the Down Payment and the Income), except with respect to acts or omissions taken or suffered by Escrow Agent in bad faith, in willful disregard of this Agreement or involving gross negligence on the part of Escrow Agent. (e) Escrow Agent shall have no liability for the selection of any particular account or investment made by the parties hereto, for fluctuations in the value of said account or investment, for the amount of Income earned on said account or investment or for any loss incurred in connection therewith. (f) References in succeeding provisions of this Agreement to the Down Payment shall be deemed to be references both to the Down Payment and the Income. (g) Escrow Agent has acknowledged its agreement to the provisions of this Section 2.3 by signing this Agreement, and Escrow Agent has executed this Agreement solely for such purpose. ARTICLE 3 TITLE TO REAL PROPERTY 3.1 Title. At Closing, Seller shall deliver to Buyer or to a Permitted Designee fee simple title to the Real Property, subject only to the Permitted Encumbrances. 3.2 Acceptance of Deeds Full Performance; Survival. The acceptance of the Deeds to the Individual Properties by Buyer and the delivery of the other Seller's Closing Documents to Buyer in accordance with the terms hereof shall be deemed full performance on the part of Seller of all of its obligations under this Agreement, except as to any such obligation which is specifically stated in this Agreement to survive the Closing or is expressly contained in documents delivered at Closing. Except where otherwise expressly provided in this Agreement, none of the provisions of this Agreement shall survive the Closing. 3.3 Title Defects Affecting the Premises. If, on the Closing Date, title to any Individual Property shall not be in accordance with the provisions of this Agreement, Seller shall be entitled, but shall not be obligated, to adjourn the Closing for one or more periods not to exceed sixty (60) days in the aggregate (taking into account any other adjournments taken by Seller hereunder) for the purpose of causing title to be placed in the condition called for by this Agreement. Buyer shall deliver notice to Seller of any title defect that is not a Permitted Encumbrance and to which Buyer intends to object within five (5) Business Days after obtaining knowledge thereof, and in no event less than two (2) Business Days prior to Closing. If on the Closing Date, as the same may be adjourned as above provided, title to such Individual Property shall not be in accordance with the terms of this Agreement, Buyer may terminate this Agreement as to such Individual Property by notice to Seller delivered on or prior to the Closing Date, as the same may have been extended, in which event the Purchase Price shall be reduced by 10 the Allocated Purchase Price for such Individual Property and the Basic Rent due under the Lease shall be reduced by the Basic Rent allocated to such Individual Property in the Lease. Seller shall be under no obligation to take any steps or to institute or prosecute any action or proceedings, or expend any sums of money, to remove from title to any Individual Property any defect, encumbrance or objection to title; provided, however, that Seller shall be responsible for discharging or causing the Title Company affirmatively to insure over (i) any and all mortgage liens created against any Individual Property by Seller and (ii) any other liens or encumbrances which do not constitute Permitted Encumbrances, which can be discharged solely by the payment of a sum of money within thirty (30) days after Seller first learns thereof, which do not in the aggregate exceed One Million Dollars ($1,000,000) in amount and which arise solely on account of obligations undertaken or actions performed by Seller prior to the Closing. Seller may use any part of the Purchase Price to discharge the same, provided that Seller shall deliver to Buyer or the Title Company at the Closing instruments in recordable form sufficient for the Title Company to discharge such liens and encumbrances of record or shall obtain the commitment of the Title Company affirmatively to insure over such liens or encumbrances as aforesaid. Except for Seller's failure to discharge or cause the Title Company affirmatively to insure over such liens or encumbrances as aforesaid, Seller shall not be deemed in default of this Agreement, and Buyer shall not be entitled to damages of any kind, if Seller shall be unable to cause title to any Individual Property to be in the condition called for by this Agreement, nor shall Buyer in such circumstances be entitled to specific performance of this Agreement. 3.4 Waiver by Buyer. Buyer, at its election, may at the Closing accept the Property notwithstanding the fact that title to the Individual Properties may be subject to one or more title exceptions or defects not provided for in this Agreement, without reduction of the Purchase Price or any credit or allowance on account thereof or any claim against Seller by reason thereof, except as expressly provided in Section 3.3. ARTICLE 4 OPERATION OF THE PREMISES PENDING THE CLOSING 4.1 Continuing Operations. Between Seller's execution of this Agreement and the Closing, Seller shall at Seller's sole cost and expense: (i) maintain the Premises in good order, condition and repair, reasonable wear and tear and casualty excepted; (ii) operate the Premises in a manner consistent with past practices; (iii) maintain accurate books and records regarding Premises ownership; (iv) except as described in the Exceptions, comply in all material respects with all applicable laws, rules and regulations relating to the Premises and its operation; (v) maintain property damage and comprehensive general liability insurance covering the Improvements in amounts and coverages not less than that presently maintained; and (vi) pay all taxes and assessments as they become due, unless being contested in good faith by appropriate proceedings and except as described in the Exceptions. 4.2 Leases and Other Agreements. Between Seller's execution of this Agreement and the Closing, Seller shall not, other than as would be permitted under the 11 terms of the Lease: (i) enter into, amend or terminate any lease, contract or agreement pertaining to the Premises (provided, however, that any such lease or agreement entered into or amended shall not create privity of contract with Buyer); (ii) modify any third party Lease, contract or agreement pertaining to the Premises; (iii) take any action which would preclude or interfere with the timely satisfaction of the conditions set forth in Article 5; (iv) except as described in the Exceptions, permit any alteration, modification or addition to the Improvements or the Land; or (v) sell or agree to sell the Premises or any part thereof. 4.3 Encumbrances. Seller shall not further encumber or suffer to be further encumbered all or any portion of the Premises between the date hereof and the date the same is acquired by Buyer pursuant to this Agreement. ARTICLE 5 CONDITIONS TO CLOSING 5.1 Buyer's Conditions to Closing. The obligations of Buyer to purchase the Premises and lease the same to Seller are subject to satisfaction of the following conditions on or before the Closing Date: (a) All of Seller's representations and warranties contained herein, or made in writing by Seller pursuant to this Agreement, shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing Date; (b) Seller's execution and delivery to Buyer, at the Closing Date, of Seller's certificate in the form attached hereto as Exhibit D (the "Non-Foreign Certificate"); (c) Seller's due and timely execution and delivery of Seller's Closing Documents and all of the other documents and items specified in Section 6.2; (d) The Confirmation Order has been entered by the Bankruptcy Court; (e) The Effective Date (as defined in the Amended Plan) has occurred; and (f) Any other conditions to the performance of Buyer's obligations under this Agreement which are set forth in any of the other provisions of this Agreement shall have been satisfied in all material respects. The conditions contained in this Section 5.1 are intended solely for the benefit of Buyer. If any of the foregoing conditions are not satisfied in a timely manner, then except as otherwise provided in this Agreement, this Agreement shall terminate (provided, that Buyer shall have the right, in its sole discretion, to waive in writing any condition not so satisfied, in which case this Agreement shall not be terminated), subject to the provisions of Section 2.3 Escrow Agent shall deliver the Down Payment to Buyer (and Seller and 12 Buyer shall execute a written instruction to Escrow Agent to do so) and neither party shall have any further obligations or liabilities hereunder except as otherwise expressly provided in this Agreement; provided, however, that if any such failure of a condition is due to Seller's default hereunder, Buyer shall have the rights and remedies provided for in Section 12.1. 5.2 Seller's Conditions to Closing. Seller's obligation to sell the Premises and lease the same back from Buyer is conditioned upon satisfaction of the following conditions on or before the Closing Date: (a) All of Buyer's representations and warranties contained herein, or made in writing by Buyer pursuant to this Agreement, shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing Date; (b) Buyer's due and timely execution and/or delivery of all documents and items to be executed and/or delivered by Buyer pursuant to this Agreement including, without limitation, (i) the Purchase Price, (ii) the Lease and (iii) all of the other documents and items specified in Section 6.3; (c) The Confirmation Order has been entered by the Bankruptcy Court; (d) The Effective Date (as defined in the Amended Plan) has occurred; and (e) Any other conditions to the performance of Seller's obligations under this Agreement which are set forth in any of the other provisions of this Agreement shall have been satisfied in all material respects. The conditions contained in this Section 5.2 are intended solely for the benefit of Seller. If any of the foregoing conditions are not satisfied in a timely manner, this Agreement shall terminate and thereafter the parties shall have no further obligations or liabilities hereby except as otherwise expressly provided in this Agreement and Seller shall have the rights and remedies provided for in Section 12.1; provided, that Seller shall have the right, in its sole discretion, to waive any condition not so satisfied, in which case this Agreement shall not be terminated. ARTICLE 6 CLOSING AND RECORDING 6.1 Closing and Closing Date. (a) The closing of the sale and leaseback of the Premises as contemplated herein (the "Closing"), to be held on or before February 28, 2005 (the "Closing Date"), shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, at 1285 Avenue of the Americas, New York, New York at 10:00 a.m. local time. TIME SHALL BE OF THE ESSENCE as to such Closing Date; provided, 13 however, that (x) Buyer shall have the right, by notice to Seller at or prior to the date then fixed as the Closing Date, to extend the Closing Date one or more times but in no event beyond March 15, 2005 and (y) Seller shall have the right, by notice to Buyer at or prior to the date then fixed as the Closing Date, to extend the Closing Date one or more times for an aggregate of not more than sixty (60) days beyond the date set forth in the first sentence of this Section 6.1 in order to obtain required consents or approvals, to remove title defects or satisfy other Closing conditions. TIME SHALL BE OF THE ESSENCE as to the Closing Date as so adjourned. Notwithstanding the foregoing, in no event shall the Closing Date be prior to the Effective Date of the Amended Plan. Notices or agreements accelerating or adjourning the Closing shall be binding on the respective parties hereto if signed by Peter E. Fisch or Kelley A. Cornish on behalf of Seller, and by Richard D. Gass on behalf of Buyer. (b) At the Closing, the parties shall deliver to one another the documents and other instruments required hereunder to be delivered at such Closing, although no delivery shall be deemed complete until all of such documents and other instruments have been delivered and the other conditions to such Closing have been satisfied (or waived as provided above). 6.2 Deliveries by Seller. Seller shall execute, acknowledge where appropriate and/or deliver the following instruments and documents to Buyer at the Closing: (a) One (1) original Deed for each Individual Property, duly executed and acknowledged by Seller and in recordable form; (b) Four (4) counterparts of the Memorandum of Lease for each Individual Property, duly executed and acknowledged by Seller and in recordable form; (c) Four (4) counterparts of the Lease, duly executed by Seller; (d) Four (4) originals of the Assignment of Intangible Property, duly executed by Seller; (e) Four (4) originals of the Non-Foreign Certificate, duly executed by Seller; (f) A copy of the Confirmation Order; (g) A good standing certificate in respect of Seller, dated not earlier than twenty (20) days prior to the Closing Date, issued by the Office of the Secretary of State of Delaware; (h) Four (4) originals of the SNDA, duly executed and acknowledged by Seller in recordable form; 14 (i) Such resolutions, authorizations, bylaws or other corporate documents or agreements relating to Seller as shall be reasonably required by Buyer in connection with this transaction; (j) Original insurance certificates and legible copies of original insurance policies required pursuant to Paragraph 16 of the applicable Lease; (k) Such affidavits as may be required by the Title Company to be able to issue the policies of title insurance called for herein, provided that such affidavits do not impose on Seller any material liabilities not assumed by it under this Agreement (it being agreed that an affidavit in customary form which is required to remove the standard pre-printed exceptions for tenants in possession and inchoate mechanics' liens in respect of work performed by Seller will not be deemed to impose material liabilities on Seller); (l) Reliance letters from third party professionals who have provided the appraisals, property condition assessment reports and Phase I environmental reports; (m) Written direction to the Escrow Agent to deliver the Down Payment and the Income to or as directed by Seller; and (n) Any other data, records, documents or agreements called for in the Agreement to be delivered by Seller which have not previously been delivered. 6.3 Deliveries by Buyer. Buyer shall execute, acknowledge where appropriate and/or deliver the following instruments and documents to Seller and take the following other actions at the Closing: (a) Buyer shall pay to Seller the Purchase Price or the balance thereof then due under Article 2 (plus or minus any adjustments and credits provided for in this Agreement) and shall make all other payments to Seller which are payable by Buyer to Seller at the Closing; (b) Four (4) counterparts of the Lease, duly executed by Buyer. (c) Four (4) counterparts of the SNDA, duly executed and acknowledged by Buyer in recordable form. (d) Four (4) counterparts of the Memorandum of Lease for each Individual Property, duly executed and acknowledged by Buyer and in recordable form. (e) A copy of resolutions of the board of directors of Buyer, certified by the Secretary or an Assistant Secretary of Buyer, which authorize Buyer, (i) to enter into the transactions contemplated by this Agreement, and (ii) to execute and deliver this Agreement and the documents, instruments and agreements to be executed and delivered by Buyer pursuant hereto, together with (1) an incumbency certificate as to 15 the authority of the person(s) executing and delivering this Agreement and such documents, instruments and agreements on behalf of Buyer and (2) a certification by such Secretary or Assistant Secretary that no other authorizations or consents are required for Buyer to enter into and perform its obligations under this Agreement and the other documents described in this Section 6.3(e); (f) A good standing certificate in respect of Buyer, dated not earlier than twenty (20) days prior to the Closing Date, issued by the Office of the Secretary of State of Massachusetts; (g) Written direction to the Escrow Agent to deliver the Down Payment and the Income to or as directed by Seller; and (h) Any other documents or agreements called for in the Agreement to be delivered by Buyer which have not previously been delivered. 6.4 Prorations. No prorations shall be required to be made in connection with the Closing since Seller, as owner, shall be responsible for all costs incurred in connection with the Premises up to the Closing Date and Seller, as tenant under the Lease, shall be responsible for all costs incurred in connection with the Premises after the Closing Date. 6.5 First Month's Rent. Seller shall pay Buyer at the Closing the rent due for the balance of the calendar month in which Closing occurs, as provided for in Paragraph 6 of the Lease. 6.6 Costs and Expenses. Buyer shall pay all of Buyer's legal and other professional fees and costs, Buyer's financing costs, and all other due diligence and other costs commissioned by Buyer. Seller shall pay the following costs and expenses incurred or payable in connection with this transaction: (a) the cost of the market value MAI appraisals prepared by Appraisal Group International for each of the Individual Properties; (b) the premium for the owner's policies of title insurance called for herein and all endorsements thereto; (c) all recording and filing fees charged by the Title Company to record and/or file any documents required to be recorded and/or filed pursuant to this Agreement; (d) all fees and costs payable to obtain the surveys delivered by Seller to Buyer as described in Exhibit K; (e) all fees and costs payable to obtain the property condition assessment reports and the Phase I environmental reports listed in Exhibit K; (f) all legal and other professional fees and costs incurred by Seller; and (g) the cost of any documentary or other transfer taxes applicable with respect to the sale of the Real Property to Buyer. 6.7 Settlement Statement. On or prior to the Closing Date, the Title Company shall prepare, execute and deliver a final settlement statement showing the categories and amounts of the closing costs and all adjustments to the Purchase Price called for herein. 16 ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER As an inducement to Buyer to enter into this Agreement and to consummate the sale and leaseback transaction contemplated hereby, Seller hereby represents and warrants to and covenants and agrees with Buyer, both as of the date hereof and again as of the Closing Date, that: 7.1 Organization. Seller (i) except as a result of the commencement of the Bankruptcy Case, is a duly organized and validly existing corporation in good standing under the laws of the State of its formation, (ii) except as a result of the commencement of the Bankruptcy Case, is duly qualified as a foreign entity in each jurisdiction in which the nature of its business or the Premises makes such qualification necessary or desirable, (iii) has the requisite corporate power and authority to carry on its business as now being conducted, and (iv) subject to the entry of the Confirmation Order, has the requisite corporate power to execute and deliver, and perform its obligations under, Seller's Closing Documents. Seller at all times since its formation has complied in all material respects, and will continue to comply, with the material provisions of all of its organizational documents, and the laws of the states in which Seller was formed and in which Seller is doing business. 7.2 Authorization. The execution and delivery by Seller of Seller's Closing Documents and Seller's performance of its obligations thereunder (i) have been duly authorized by all requisite corporate action on the part of Seller, (ii) subject to the entry of the Confirmation Order, will not violate any provision of any applicable Seller's Legal Requirements, any order, writ, decree, injunction or demand of any court or other Governmental Authority, any organizational document of Seller or any indenture or agreement or other instrument to which Seller is a party or by which Seller is bound, (iii) subject to the entry of the Confirmation Order, will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any lien of any nature whatsoever upon any of the property or assets of Seller pursuant to, any indenture or agreement or instrument to which Seller is a party or is bound, and (iv) have been duly executed and delivered by Seller. Subject to the entry of the Confirmation Order, except for those obtained or filed on or prior to the Closing Date, Seller is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority or other agency in connection with or as a condition to the execution, delivery or performance of Seller's Closing Documents. 7.3 Litigation. There is no pending litigation or other proceeding against Seller affecting the Premises in respect of which Seller has been served with process or otherwise received written notice except for (i) claims for personal injury, property damage or worker's compensation for which the insurance carrier has been notified on a timely basis and has not disclaimed liability and in which the amounts claimed do not exceed the applicable insurance policy limits (and as to any of such litigation or other proceeding, Seller shall remain responsible for any amounts payable 17 with respect thereto which are not fully covered by insurance, including the amount of any applicable "deductible," and hereby indemnifies Buyer against loss or liability with respect thereto), and (ii) other litigation or proceedings shown in the Exceptions. 7.4 Compliance. Except as may be set forth in the Exceptions, Seller, the Premises and Seller's use of the Premises and operations thereat comply in all material respects with all applicable Legal Requirements and Seller has not received notice of any violation of applicable Insurance Requirements. Seller is not in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority, the violation of which is reasonably likely to have a Material Adverse Effect. 7.5 Foreign Person. Seller is not a "foreign person" within the meaning of ss. 1445(f)(3) of the Code. 7.6 Investment Company Act; Public Utility Holding Company Act. Seller is not (i) an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money. 7.7 No Defaults. No default or event of default exists under or with respect to any of Seller's Closing Documents, excluding the Bankruptcy Case of Seller and its affiliates. 7.8 Title to the Premises. Seller owns good, indefeasible, marketable and insurable fee simple title to the Premises, free and clear of all liens, other than Permitted Encumbrances. There are no outstanding options to purchase or rights of first refusal affecting the Premises. This warranty shall not survive the Closing. 7.9 Service Contracts. No service contracts or other agreements are in effect with respect to the Premises (other than this Agreement) except those that (i) have been entered in the ordinary course of business, (ii) have a term not longer than three (3) years except for certain elevator service contracts and (ii) contain no rights to purchase the Premises. 7.10 Condemnation. No condemnation has been commenced or, to Seller's knowledge, is contemplated (other than as set forth in the Exceptions) with respect to all or any portion of the Premises or for the relocation of roadways providing access to the Premises. 7.11 Utilities and Public Access. The Premises has adequate rights of access to public ways and is served by adequate water, sewer, sanitary sewer and storm drain facilities as are adequate for full utilization of the Premises for its current purpose. Except as otherwise disclosed by the surveys referred to in EXHIBIT K, all public utilities 18 necessary to the continued use and enjoyment of the Premises as presently used and enjoyed are located in the public right-of-way abutting the premises, and all such utilities are connected so as to serve the Premises either (i) without passing over other property, or (ii) if such utilities pass over other property, pursuant to valid easements. All roads necessary for the full utilization of the Premises for its current purpose have been completed and dedicated to public use and accepted by all Governmental Authorities or are the subject of access easements for the benefit of the Premises. This warranty shall not survive the Closing. 7.12 Environmental Compliance. Except as set forth in the Environmental Reports, Seller represents, warrants and covenants, as to itself and the Premises: (a) Seller and the Premises are in compliance with all applicable Environmental Laws, which compliance includes, without limitation, the possession by Seller of and compliance with all environmental, health and safety Permits, licenses and other governmental authorizations required in connection with the ownership and operation of the Premises under all Environmental laws. (b) There is no Environmental Claim pending or, to Seller's knowledge, threatened, and no penalties arising under Environmental Laws have been assessed, against Seller, the Premises or against any Person whose liability for any Environmental Claim Seller has or may have retained or assumed either contractually or by operation of law, and no investigation or review is pending or, to the knowledge of Seller, threatened by any Governmental Authority, citizens group, employee or other person with respect to any alleged failure by Seller or the Premises to have any environmental, health or safety permit, license or other authorization required under, or to otherwise comply with, any Environmental Law or with respect to any alleged liability of Seller for any Use or Release of any Hazardous Substances or the presence, Use or Release of any Hazardous Substances at, on, in, under or from any Premises. (c) To the knowledge of Seller after due inquiry (which inquiry, with respect to all periods prior to Seller's ownership of the Premises, is limited to review of the Environmental Reports), there have been and are no past or present Releases or threats of Release of any Hazardous Substance that are likely to form the basis of any Environmental Claim against Seller, the Premises or, to Seller's knowledge, against any person whose liability for any Environmental Claim Seller has or may have retained or assumed either contractually or by operation of law. (d) To the knowledge of Seller after due inquiry (which inquiry, with respect to all periods prior to Seller's ownership of the Premises, is limited to review of the Environmental Reports), and except as disclosed in the Environmental Reports, without limiting the generality of the foregoing, there is not present at, on, in or under the Premises, PCB-containing equipment, asbestos or asbestos containing materials, underground or aboveground storage tanks or surface impoundments for Hazardous Substances, lead in drinking water (except in concentrations that comply with all Environmental Laws) or lead-based paint. 19 (e) No liens are presently recorded with the appropriate land records under or pursuant to any Environmental Law with respect to the Premises and, to Seller's knowledge, no Governmental Authority has been taking or is in the process of taking any action that could subject the Premises to Liens under any Environmental Law. (f) No conditions exist which would under any Environmental Laws require Seller to place a notice on any deed to the Premises with respect to the presence, Use or Release of Hazardous Substances at, on, in, under or from the Premises and the Premises has no such notice in its deed. 7.13 No Joint Assessment; Separate Lots. Except as described in the Exceptions, (a) Seller has not and shall not suffer, permit or initiate the joint assessment of any Real Property (i) with any other real property constituting a separate tax lot, and (ii) with any portion of the Premises which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to the Premises as a single lien and (b) the Premises is comprised of one or more parcels, each of which constitutes a separate tax lot and none of which constitutes a portion of any other tax lot. 7.14 Certificate of Occupancy. To the best of Seller's knowledge, the use being made of the Premises is in conformity in all material respects with the certificate of occupancy and/or Permits for the Premises and any other restrictions, covenants or conditions affecting the Premises. The Premises contains all Equipment necessary to use and operate the Premises in the manner required by the Lease. 7.15 Survival of Representations and Warranties. Seller agrees that (i) all of the representations and warranties of Seller set forth in this Agreement and in the other Seller's Closing Documents delivered on the Closing Date are made as of the Closing Date (except as expressly otherwise provided), (ii) all representations and warranties made by Seller (other than Sections 7.8 and 7.11) shall survive the delivery of the Deeds and continue for a period of one (1) year thereafter, and (iii) Buyer is entitled to rely and has relied on the foregoing representations and warranties of Seller. Any action by Buyer against Seller alleging a material misrepresentation or breach of any of the warranties set forth in Article 7 shall be commenced within said one (1) year period. Notwithstanding anything to the contrary set forth in this Article 7 or elsewhere in this Agreement, if prior to the Closing Buyer has or obtains knowledge that any of Seller's warranties or representations set forth in this Article 7 is untrue in any respect, and Buyer nevertheless proceeds with the Closing, then the breach by Seller of the warranties or representations as to which Buyer shall have or obtained such knowledge shall be waived by Buyer and Seller shall have no liability to Buyer or its successors or assigns in respect thereof. ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF BUYER As an inducement to Seller to enter into this Agreement and to consummate the sale and leaseback transaction contemplated hereby, Buyer hereby 20 represents and warrants to and covenants and agrees with Seller, both as of the date hereof and again as of the Closing Date, that: 8.1 Organization. Buyer (i) is a duly organized and validly existing corporation in good standing under the laws of the State of its formation, (ii) is, or promptly after the Closing will be, duly qualified as a foreign entity in each jurisdiction in which the nature of its business or the Premises makes such qualification necessary or desirable, (iii) has the requisite power and authority to carry on its business as now being conducted, and (iv) has the requisite power to execute and deliver, and perform its obligations under, the Buyer's Closing Documents. Buyer at all times since its formation has complied in all material respects, and will continue to comply, with the material provisions of all of its organizational documents, and the laws of the states in which Buyer was formed and in which Buyer is doing business. 8.2 Authorization. The execution and delivery by Buyer of Buyer's Closing Documents and Buyer's performance of its obligations thereunder (i) have been duly authorized by all requisite trust action on the part of Buyer, (ii) will not violate any provision of any applicable Legal Requirements, any order, writ, decree, injunction or demand of any court or other Governmental Authority, any organizational document of Buyer or any indenture or agreement or other instrument to which Buyer is a party or by which Buyer is bound, (iii) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any lien of any nature whatsoever upon any of the property or assets of Buyer pursuant to, any indenture or agreement or instrument other than those covered by Section 7.2(iii), and (iv) have been duly executed and delivered by Buyer. Except for those obtained or filed on or prior to the Closing Date, Buyer is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority or other agency in connection with or as a condition to the execution, delivery or performance of the Buyer's Closing Documents. 8.3 Litigation. Except as described in the Exceptions, there are no actions, suits or proceedings at law or in equity by or before any Governmental Authority or other agency now pending and served or, to the knowledge of Buyer, threatened against Buyer that would affect the Premises or Buyer's ability to consummate the Closing. 8.4 No Bankruptcy Filing. Buyer is not contemplating either the filing of a petition by Buyer under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of Buyer's assets or property, and Buyer has no knowledge of any person contemplating the filing of any such petition against Buyer. 8.5 Compliance with Anti-Terrorism Laws. Neither the Buyer nor any person who owns a controlling interest in or otherwise controls the Buyer is (i) listed on the Specially Designated Nationals and Blocked Persons List or any other similar list maintained by the Office of Foreign Assets Control, Department of the Treasury, pursuant to any authorizing statute, executive order or regulation, (ii) a "specially designated global terrorist" or other person listed in Appendix A to Chapter V 21 of 31 C.F.R., as the same has been from time to time updated and amended, or (iii) a person either (A) included within the term "designated national" as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or a person similarly designated under any related enabling legislation or any other similar Executive Orders. 8.6 Compliance with Anti-Money Laundering Measures. The Buyer has taken measures to assure that (i) funds to be used to pay the Purchase Price and (ii) with respect to each holder of a direct interest in the Buyer, funds invested by such holders in the Buyer, are derived from legal sources and such measures have been undertaken in accordance with the Bank Secrecy Act, 31 U.S.C. ss.ss. 5311 et seq., and all applicable laws, regulations and government guidance on compliance therewith and on the prevention and detection of money laundering violations under 18 U.S.C. ss.ss. 1956 and 1957. 8.7 Survival of Representations and Warranties. Buyer agrees that (i) all of the representations and warranties of Buyer set forth in this Agreement and in the other Buyer's Closing Documents delivered on the Closing Date are made as of the Closing Date (except as expressly otherwise provided), (ii) all representations and warranties made by Buyer shall survive the delivery of the Deeds and continue for a period of one (1) year thereafter and (iii) Seller is entitled to rely on and has relied on the foregoing representations and warranties of Buyer. ARTICLE 9 BANKRUPTCY COVENANTS 9.1 Confirmation Order. Seller shall obtain a Confirmation Order from the Bankruptcy Court that provides, inter alia, that: (a) Seller is authorized, empowered and directed as part of the consummation of the Amended Plan to take all steps, and to execute and deliver all documents necessary to implement the Agreement and the transactions contemplated thereby. (b) the Agreement and its provisions and the transactions contemplated thereby are approved. ARTICLE 10 CASUALTY 10.1 Casualty. If prior to the Closing Date all or any portion of the Improvements constituting any Individual Property are destroyed or damaged by fire or the elements or by any other cause (a "Damaged Property"), Seller shall promptly provide written notice thereof to Buyer. If Seller delivers notice to Buyer within thirty (30) days after the occurrence of such damage or destruction that Seller intends to restore the Damaged Property, then Buyer and Seller will continue to be obligated by the terms 22 of this Agreement. If Seller so commits to restore the Damaged Property, at Closing any insurance proceeds received by Seller on account of such Damaged Property and not expended on restoration thereof shall, if required under the terms of the Lease, be delivered into escrow and treated as a "Restoration Fund" (as that term is defined in the Lease), and Seller will restore the Damaged Property in accordance with the applicable provisions of the Lease. If Seller elects not to restore Damaged Property, or if Seller fails timely to deliver a notice of election to Buyer, then the Damaged Property will be withdrawn from this Agreement and the Purchase Price will be reduced by the Allocated Purchase Price of such Damaged Property and the Damaged Property shall be treated as an "Affected Premises" as that term is defined in Paragraph 18 of the Lease, as if the same were in effect, and thereupon the parties thereto shall be released from their respective further obligations and liabilities under this Agreement in respect of the Damaged Property, except with respect to those provisions which are specifically stated herein to survive a termination of this Agreement. ARTICLE 11 CONDEMNATION 11.1 Condemnation. In the event of the institution or threatened institution prior to the Closing Date of any proceeding (judicial, administrative or otherwise), which shall relate to the proposed taking by eminent domain (a "Taking") of all or any portion of any Individual Property, or all or any portion of the means of vehicular access to any Individual Property which materially and adversely affects access to the Individual Property, or reduces the amount of space available for parking below that required by zoning regulations, Buyer and Seller shall each have the right and option to terminate this Agreement solely as to such Individual Property by giving the other notice to such effect within thirty (30) days after its receipt of written notice of any such occurrence. Seller shall promptly furnish Buyer with written notice in respect of such occurrence. Should either party so terminate this Agreement solely as to such Individual Property, the Purchase Price shall be reduced by the Allocated Purchase Price of the Individual Property to which such Taking relates, the such Individual Property shall be treated as an "Affected Premises" as that term is defined in Paragraph 18 of the Lease, as if the same were in effect, and thereupon the parties thereto shall be released from their respective further obligations and liabilities under this Agreement in respect of the Individual Property to which such Taking relates, except with respect to those provisions which are specifically stated herein to survive a termination of this Agreement. In the event that neither party elects to terminate this Agreement as to the applicable Individual Property, Buyer shall accept conveyance of the Individual Property subject to such proceeding or without the portion of the Individual Property taken and without any reduction in Purchase Price, Seller shall assign its interest in any condemnation award to Buyer at the Closing and the Basic Rent payable under the Lease in respect of such Individual Property shall be equitably reduced. 23 ARTICLE 12 REMEDIES 12.1 Remedies. The following exclusive remedies shall apply upon any breach of this Agreement by Seller or Buyer: (a) Seller and Buyer agree that if Buyer shall default in performing its obligations under this Agreement and the conditions set forth in Section 5.1 have been satisfied, Seller shall be entitled as its sole remedy to receive the Down Payment from Escrow Agent as liquidated damages, and not as a penalty. Buyer and Seller agree that (i) such liquidated damages are based in part on the following damages which Seller will suffer on account of a default by Buyer and the failure of the Closing to occur, which damages Buyer and Seller agree are incapable of exact determination in amount: the removal of the Premises from the real estate market and the loss of the possibility of obtaining a new purchaser during such time at a higher amount; the possibility of Seller's being unable to obtain a new purchaser for the amount of the Purchase Price provided for herein; various restrictions related to the management and marketing of the Premises during the period this Agreement is in effect; the inconvenience and expense of remarketing the Premises for sale; the negative effect on the value of the Premises of the sale of the Premises provided for herein not going forward; and the expense of remarketing, negotiating and documenting a new transaction; and (ii) that the Down Payment is a reasonable estimate of Seller's damages. (b) If at the Closing Date the conditions to the obligation of Buyer to close title as set forth in Section 5.1 have not been fulfilled on account of the default of Seller hereunder, and the Closing shall not occur as a result thereof, then Buyer shall be entitled to pursue, at its election, either of the following as its sole and exclusive remedy: (i) terminate this Agreement and have the Down Payment returned to it by the Escrow Agent; or (ii) seek specific performance of Seller's obligations under this Agreement. Buyer hereby waives any right to sue Seller for damages (including consequential and punitive damages) for any default hereunder but if the Closing occurs such waiver shall not apply to damages (other than consequential and punitive damages) to which Buyer may be entitled by reason of any breach of any of Seller's warranties or representations hereunder which survive the Closing; provided, however, that in the event of a willful default by Seller which would render the remedy of specific performance unavailable to Buyer, Buyer may seek damages (but not consequential or punitive damages) from Seller, provided that Buyer has sought and been unable to pursue the remedy of specific performance within six (6) months after the occurrence of such default. The foregoing provisions shall not be deemed to limit Buyer's right to reimbursement of costs pursuant to Section 6.6 of this Agreement. (c) The provisions of this Article 12 shall survive the Closing or any termination of this Agreement. 24 ARTICLE 13 DISPUTE RESOLUTION 13.1 Bankruptcy Court Jurisdiction; Arbitration. Until the Bankruptcy Court shall have entered an order closing the Bankruptcy Case, the parties hereby agree that, without limitation of any party's right to appeal any order of the Bankruptcy Court, (a) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Agreement and to decide any claims or disputes which may arise or result from, or be connected with this Agreement, any breach or default hereunder, or the transactions contemplated herein, and (b) any and all claims, actions, causes of action, suits and proceedings relating to the foregoing shall be filed and maintained only in the Bankruptcy Court, and the parties hereby consent and submit to the jurisdiction of the Bankruptcy Court for all such purposes. Thereafter, any dispute, controversy or claim arising out of, relating to or in connection with any provision of this Agreement shall be subject to arbitration in accordance with the following provisions: (a) Any dispute, controversy or claim arising out of, relating to or in connection with any provision of this Agreement, shall be finally settled by arbitration administered by American Arbitration Association ("AAA"), in accordance with this Article 13, and in accordance with AAA's Expedited Commercial Arbitration Rules (the "Rules") in effect at the time of the arbitration, except as they may be modified herein or by agreement of the parties. The place of arbitration shall be Syracuse, Onondaga County, New York. The party desiring arbitration shall serve upon the other party a written notice demanding that the dispute be arbitrated pursuant to this Article 13. (b) The award rendered by the arbitrators shall be final and binding on the parties. Judgment on the award may be entered in any court of competent jurisdiction. The parties waive to the fullest extent permitted by law any rights to appeal to, or to seek review of such award by, any court. (c) The arbitration shall be conducted by three neutral arbitrators, each of whom has substantial expertise in the subject matter of the dispute and substantial experience arbitrating commercial disputes. Each party shall appoint one arbitrator, obtain its appointee's acceptance of such appointment, and deliver written notification of such appointment and acceptance to the other party within fifteen (15) days after delivery of the request for arbitration. In the event a party fails to appoint an arbitrator or deliver notification of such appointment to the other party within this time period, upon request of either party, such arbitrator shall instead be appointed by the AAA within fifteen (15) days of receiving such request. The two arbitrators appointed in accordance with the above provisions shall appoint the third arbitrator, obtain the appointee's acceptance of such appointment and notify the parties in writing of such appointment and acceptance within fifteen (15) days of their appointment. If the first two appointed arbitrators fail to appoint a third arbitrator or notify the parties of that appointment within this time period, then, upon request of either party, the third arbitrator shall be appointed by the AAA within fifteen (15) days of receiving such request. The third arbitrator shall serve as Chairman of the tribunal. 25 (d) In addition to any discovery permitted under the Rules, each party shall produce relevant, non-privileged, documents or copies thereof requested by the other party within the time limits set by the tribunal. (e) By agreeing to arbitration, the parties do not intend to deprive any court with jurisdiction of its ability to issue a preliminary injunction, attachment or other form of provisional remedy in aid of the arbitration and a request for such provisional remedies by a party to a court shall not be deemed a waiver of this agreement to arbitrate. In addition to the authority conferred upon the tribunal by the rules specified above, the tribunal shall also have the authority to grant provisional remedies, including injunctive relief. The parties agree that the tribunal may exclude evidence it deems to be irrelevant. (f) The parties agree that the tribunal may rule upon any claim or counterclaim, or any portion thereof (the "Claim"), without holding an evidentiary hearing, if, after affording both parties an opportunity to present written submissions and documentary evidence, the tribunal concludes that there is no material issue of fact and that the Claim can be determined as a matter of law. (g) The parties agree to compensate the arbitrators at rates commensurate with those such arbitrators would charge private clients on an hourly or daily basis, plus travel and other expenses, such amounts to be determined by the arbitrators. (h) Each party shall bear an equal share of the arbitrators' fees and administrative fees of arbitration. All the terms of this Agreement shall be governed by good faith and shall bind and inure to the benefit of Seller and Buyer. 13.2 Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT EITHER PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THE PREMISES, THIS AGREEMENT OR ANY DOCUMENTS EXECUTED IN CONNECTION HEREWITH, OR IN RESPECT OF ANY COURSE OF CONDUCT, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER PARTY WITH RESPECT THERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS TRANSACTION AND SHALL SURVIVE THE CLOSING OR TERMINATION OF THIS AGREEMENT. ARTICLE 14 MISCELLANEOUS 14.1 Notices. All notices, consents, approvals or other communications required or permitted to be given under this Agreement shall be in writing and be deemed to have been duly given (i) when delivered personally if delivered on a business day (or if the same is not a business day, then the next business day after delivery), (ii) three (3) 26 business days after being sent by United States mail, registered or certified mail, postage prepaid, return receipt requested or (iii) if delivery is made by Federal Express or a similar, nationally recognized overnight courier service then on the date of delivery (or if the same is not a business day, then the next business day after delivery); and addressed as follows: If to Seller: The Penn Traffic Company 1200 State Fair Boulevard Syracuse, New York 13209 Attn.: Francis D. Price, Esq. With a copy to: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019-6064 Attn.: Peter E. Fisch, Esq. Kelley A. Cornish, Esq. If to Buyer: Equity Industrial Partners Corp. 145 Rosemary Street, Suite E Needham, MA 02494 Attn.: Donald Levine With a copy to: Dionne & Gass 73 Tremont Street Boston, Massachusetts 02108 Attn.: Richard D. Gass, Esq. or such other address as either party may from time to time specify in writing to the other in the manner aforesaid. 14.2 Brokers and Finders. Each party represents and warrants to the other party that the representing party has incurred no liability for any brokerage commission or finder's fee arising from or relating to the transactions contemplated by this Agreement, except that Seller represents and warrants that Seller has retained Keen Realty, LLC ("Keen") as Seller's advisor and will compensate Keen pursuant to a separate agreement and Buyer represents and warrants that Buyer has retained The Stubblebine Company ("Stubblebine") as Buyer's advisor and will compensate Stubblebine pursuant to a separate agreement. In the event of a claim for any broker's fee, finder's fee, commission or other similar compensation in connection herewith other than as set forth above, (i) Buyer, if such claim is based upon any agreement alleged to have been made by Buyer, hereby agrees to indemnify, defend, protect and hold Seller harmless against any and all liability, loss, cost, damage or expense (including reasonable attorneys' and paralegals' fees and costs) which Seller may sustain or incur by reason of such claim, and (ii) Seller, if such claim is based upon any agreement alleged to have been made by Seller, hereby agrees to indemnify, defend, protect and hold Buyer harmless against any and all liability, loss, cost, damage or expense (including reasonable 27 attorneys' and paralegals' fees and costs) which Buyer may sustain or incur by reason of such claim. 14.3 Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors, heirs, administrators and assigns, except that neither party's interest under this Agreement may be assigned, encumbered or otherwise transferred, whether voluntarily, involuntarily, by operation of law or otherwise, without the prior written consent of the other party; provided, however, without being relieved of any liability under this Agreement, Buyer reserves the right to assign its rights and obligations hereunder to any entity that controls, is controlled by or is under common control with Buyer (a "Permitted Designee"), and/or may permit a Permitted Designee to take title at Closing. 14.4 Amendments. This Agreement may be amended or modified only by a written instrument executed by the party asserted to be bound thereby. 14.5 Continuation and Survival of Indemnities, Representations and Warranties. All indemnities, representations and warranties by Seller and Buyer contained herein or made in writing pursuant to this Agreement or any other instrument delivered by Seller and Buyer pursuant hereto are intended to and shall remain true, correct and binding as of the time of Closing and, in accordance with Sections 7.15 and 8.6, shall survive the execution and delivery of this Agreement, the delivery of the Deed and the transfer of title to the Premises. All representations and warranties of Seller or Buyer contained in any certificate or other instrument delivered at any time by or on behalf of Seller or Buyer, respectively, in connection with the transaction contemplated hereby shall constitute representations and warranties hereunder. 14.6 Interpretation. Whenever used herein, the term "including" shall be deemed to be followed by the words "without limitation." Words used in the singular number shall include the plural, and vice-versa, and any gender shall be deemed to include each other gender. The captions and headings of the Articles and Sections of this Agreement are for convenience of reference only, and shall not be deemed to define or limit the provisions hereof. 14.7 Governing Law. Each of Buyer and Seller hereby agree that the State of New York has a substantial relationship to the parties and to the underlying transaction embodied hereby, and in all respects (including, without limiting the generality of the foregoing, matters of construction, validity and performance) this Agreement and the obligations arising hereunder shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed therein and all applicable law of the United States of America. 14.8 Merger of Prior Agreements. This Agreement (including the exhibits hereto) constitutes the entire agreement between the parties with respect to the purchase and sale of the Premises specifically described herein and supersedes all prior and contemporaneous (whether oral or written) agreements and understandings between the parties hereto relating to the specific subject matter hereof. 28 14.9 Attorneys' Fees. In the event of any action or proceeding at law or in equity or pursuant to Article 13 of this Agreement between Buyer and Seller (including an action or proceeding between Buyer and the trustee or debtor in possession while Seller is a debtor in a proceeding under the Bankruptcy Code or any successor statute to such Code) to enforce or interpret any provision of this Agreement or to protect or establish any right or remedy of either Buyer or Seller hereunder, the substantially unsuccessful party to such action or proceeding shall pay to the substantially prevailing party all costs and expenses, including, without limitation, reasonable attorneys' and paralegal fees and expenses, incurred in such action or proceeding and in any appeal in connection therewith by such prevailing party, whether or not such action, proceeding or appeal is prosecuted to judgment or other final determination, together with all costs of enforcement and/or collection of any judgment or other relief. The term "prevailing party" shall include, without limitation, a party who brings an action against the other by reason of the other's breach or default and obtains substantially the relief sought, whether by compromise, settlement or final, non-appealable judgment. If such prevailing party shall recover judgment in any such action, proceeding or appeal, such costs, expenses and attorneys' and paralegal fees shall be included in and as a part of such judgment. 14.10 Relationship. It is not intended by this Agreement to, and nothing contained in this Agreement shall, create any partnership, joint venture, financing arrangement or other agreement between Buyer and Seller. No term or provision of this Agreement is intended to be, or shall be, for the benefit of any person, firm, organization or corporation not a party hereto, and no such other person, firm, organization or corporation shall have any right or cause of action hereunder. 14.11 Authority. The individuals signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing. 14.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. It shall be necessary to account for only one fully executed counterpart in proving this Agreement. 14.13 Exhibits. References in this Agreement to Exhibits mean the exhibits described in the List of Exhibits attached hereto, all of which exhibits are incorporated by reference into this Agreement. [signature page to follow] IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the date first above written. "BUYER" EQUITY INDUSTRIAL PARTNERS CORP., a Massachusetts corporation By: /s/ ---------------------------------- Name: Title: "SELLER" THE PENN TRAFFIC COMPANY, a Delaware corporation By: /s/ ---------------------------------- Name: Title: As Escrow Agent only for the sole purpose of agreeing to the provisions of Section 2.3 of this Agreement: FIRST AMERICAN TITLE INSURANCE COMPANY By: /s/ -------------------------------- Name: Title: Exhibit A JAMESTOWN DC PROPERTY - --------------------- ALL THAT TRACT OR PARCEL OF LAND, situate in Town of Ellicott, County of Chautauqua, and State of New York, being part of Lot No. 58, Township 2 and Range 10 of the Holland Land Company's Survey, and being further bounded and described as follows: BEGINNING at a found iron stake in the westerly line of Jackson Avenue, said iron stake being North 01(degree) 02' 00" East, 1050 feet from the intersection of the old centerline of Fairmount Avenue (formerly Lakewood Road) and the westerly line of Jackson Avenue, said iron stake also being at the northeasterly corner of lands conveyed to Timothy W. Mara by warranty deed recorded August 2, 1984 in the Chautauqua County Clerk's Office in Liber 2016 of Deeds at Page 188; thence North 88(degree) 59' 20" West along the northerly line of lands of said Mara 200.00 feet to a found iron stake; thence continuing along the same course North 88(degree) 59' 20" West, 527.85 feet to a found iron stake; thence continuing North 88(degree) 59' 20" West 126.13 feet to a found iron stake in the centerline of Greene Avenue (undeveloped); thence North 04(degree) 06' 32" East along the said centerline of Greene Avenue 535.98 feet to a found iron stake in the southeasterly line of lands of Consolidated Rail Corporation (formerly Erie-Lackawanna Railroad right-of-way); thence North 57(degree) 07' 00" East along the said southeasterly line of Consolidated Rail Corporation 175.85 feet to an iron stake; thence North 00(degree) 14' 00" West along an easterly line of lands of Consolidated Rail Corporation, 9.96 feet to an iron stake; thence South 88(degree) 58' 00" East along a southerly line of lands of Consolidated Rail Corporation. 42.06 feet to an iron stake; thence North 57(degree) 07' 00" East along the southeasterly line of lands of Consolidated Rail Corporation, 474.91 feet to a found iron stake; thence South 88(degree) 58' 00" East, 139.02 feet to a found iron stake; thence North 57(degree) 07' 00" East, 116.49 feet to an iron stake in the westerly line of Jackson Avenue (66 foot wide right-of-way), said iron stake being South 01(degree) 02' 00" East, 122.88 feet from a found iron stake at the intersection of the said westerly line of Jackson Avenue and the southeasterly line of lands of Consolidated Rail Corporation; thence South 01(degree) 02' 00" West along the said westerly line of Jackson Avenue. 130.00 feet to a found iron stake; thence continuing along the same line South 01(degree) 02' 00" West, 100.00 feet to a found iron stake; thence continuing along the same line South 01(degree) 02' 00" West, 100.00 feet to a found iron stake; thence continuing along the same line South 01(degree) 02' 00" West. 61.80 feet to an iron stake; thence South 88(degree) 58' East, 7.66 feet to an iron stake in the westerly line of Jackson Avenue (50 feet wide right-of-way); thence South 01(degree) 02' 00" West along the westerly line of Jackson Avenue, 581.15 feet to the iron stake at the point or place of beginning. Exhibit A SYRACUSE 1 DC PROPERTY - ---------------------- ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Geddes, County of Onondaga and State of New York, being part of Lot 10 in said Town, being part of Onondaga Salt Springs Reservation, and being more specifically described as follows: Beginning at a point in the westerly line of lands of the former D. L. & W. Railroad, (now Conrail) at the intersection of said westerly line with the northerly line of a parcel of land conveyed to Niagara Mohawk Power Corporation and recorded in Book of Deeds 556 at Page 501 in the Onondaga County Clerk's office, Running thence South 58(degree) -11' -14" West a distance of 600.90 feet along the northerly line of said parcel conveyed to Niagara Mohawk Power Corporation to a point in the easterly line of a parcel appropriated by the State of New York and shown on Map 210 as parcel 293, (1983 appropriation), Thence North 60(degree) -30' -10" West a distance of 98.48 feet along the easterly line of said appropriation to an angle point, Thence North 53(degree) -29' -26" West a distance of 115.09 feet along the easterly line of said appropriation to an angle point, Thence North 64(degree) -46' -46" West a distance of 116.0 feet along the easterly line of said appropriation to a point in the easterly line of another appropriation by the State of New York and shown on Map 122 as Parcel 164. Thence North 48(degree) -05' -22" West a distance of 267.24 feet along the easterly line of said Parcel 164 and along the easterly line of another parcel of land appropriated by the State of New York and shown on Map 7-C as Parcel 300 to the northeasterly corner of said Parcel 300, (said northeasterly corner being the southeasterly corner of a parcel of land conveyed by the State of New York to Penn Traffic Company and shown on Map 9-C as Parcel 303 and recorded in Book of Deeds 3978 at Page 98 in the Onondaga County Clerk's office, Thence South 29(degree) -56' -25" West a distance of 74.0 feet along the southerly line of said Parcel 303 to the southwesterly corner thereof, Thence on the following courses and distances along the westerly line of said Parcel 303: North 59(degree) -57' -38" West a distance of 299.69 feet to an angle point, North 55(degree) -17' -26" West a distance of 125.44 feet to an angle point, North 49(degree) -32' -19" West a distance of 146.74 feet to an angle point, North 41(degree) -42' -20" West a distance of 54.33 feet to an angle point, North 19(degree) -35' -08" West a distance of 23.0 feet to the northwesterly corner of said parcel 303, Thence North 32(degree) -27' -40" East a distance of 181.97 feet along the northerly line of said Parcel 303 to an angle point, Thence North 59(degree) -02' -52" East a distance 34.13 feet along the northerly line of said Parcel 303 to the northwesterly corner thereof, Thence South 40(degree) -17' -18" East a distance of 43.0 feet along the easterly line of said Parcel 303 to a point in the southerly line of Walters Road, as widened by appropriations by the State of New York, Thence North 56(degree) -07' -19" East a distance of 190.53 feet along the southerly line of Walters Road, as widened, to an angle point, Thence North 58(degree) -16' -02" East a distance of 322.34 feet along the southerly line of Walters Road, as widened, to a point in the westerly line of lands of the former D. L. & W Railroad, now Conrail, Thence South 51(degree) -45' -41" East a distance of 1223.0 feet along the westerly line of said Railroad to the point of beginning. ALSO ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Geddes, County of Onondaga and State of New York, being part of Subdivision No. 2 on the east half of Farm Lot No. 10 of the Onondaga Salt Springs Reservation, bounded as follows, viz: BEGINNING at a point on the Southwesterly sideline of Van Vleck Road, such point being where said Southwesterly sideline is intersected by the Northeasterly sideline of the strip of land now or formerly of the Erie Lackawanna Railroad Co.; thence running along the boundary of said land now or formerly of the Erie Lackawanna Railroad Co. North 51(degree) 45' 41" West a distance of 255.10 feet to a point; thence North 58(degree) 03' 20" East a distance of 86.48 feet to a point in the southwesterly line of Van Vleck Road; thence South 31(degree) 56' 40" East along the southwesterly line of Van Vleck Road, a distance of 240 feet to the point and place of beginning. ALSO ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Geddes, County of Onondaga, State of New York, being part of Farm Lot 7 of Town of Geddes, and being all the lands owned by said grantors in said Farm Lot 7 of said Town of Geddes, bounded on the South by Walters Road; on the East by the lands of the Delaware, Lackawanna Railroad, the West and north by the lands of the State of New York; which lands are particularly bounded and described as follows: Beginning at the intersection of the southerly line of the New York State Thruway, known as Interstate Route 90, and the easterly line of a parcel of land appropriated by the people of the State of New York for the widening of Route No. 48. State Highway No. 3496. shown as Parcel No. 20 on Map No. 19 filed in the Onondaga County Clerk's Office on June 19, 1961 in Book of Deeds 2047 at Page 136 etc.; running thence from the above-mentioned point of beginning North 77(degree) 37' 19" East along the southerly line of the New York State Thruway a distance of 1046.96 feet to the westerly line of lands of the D.L. and W. Railroad; thence South 51(degree) 45' 41" East along the westerly line of lands of the D .L. & W. Railroad a distance of 348.37 feet to the northerly line of lands appropriated by the State of New York and shown as Parcel No. 170 on Map No. 127. filed in the Onondaga County Clerk's Office on June 19, 1961 in Book of Deeds 2047 at Page 125, etc., thence South 60(degree).33' 52" West along the Northerly line of said last mentioned appropriation a distance of 470.11 feet to an angle point; thence North 83(degree) 23' 44" West along the northerly line of said last mentioned appropriation a distance of 57.01 feet to an angle point; thence North 67(degree) 40' 22" West along the northerly line of a parcel of land appropriated by the State of New York and shown as parcel No. 169 on Map No. 127. filed in the Onondaga County Clerk's Office on June 19, 1961 in Book of Deeds 2047 at Page 125 etc; a distance of 168.71 feet to an angle point; thence South 79(degree) 18' 30" West along the northerly line of said last above-mentioned appropriation a distance of 240.21 feet to the northwesterly corner of said last above-mentioned appropriation. (said corner being located on the easterly line of a parcel of land owned by the State of New York and recorded in Book of Deeds 1744 at Page 140 etc. in the Onondaga County Clerk's Office on April 13, 1955); thence North 42(degree) 36' 32" West along the easterly line of the lands of the State of New York a distance of 72 .64 feet to an angle point; thence South 60(degree) 04' 10" West along the northerly line of lands of the State of New York a distance of 121.42 feet in the southeasterly corner of a parcel of land appropriated by the State of New York and shown as Parcel #20 on Map #19 filed in the Onondaga County Clerk's Office on June 19, 1961 in Book of Deeds 2047 at Page 136 etc.; thence North 54(degree) 22' 46" West along the easterly line of the last above-mentioned appropriation a distance of 349.00 feet to the southerly line of lands of the New York State Thruway the point and place of beginning. EXCEPTING THEREFROM property appropriated by the People of the State of New York by Notices of Appropriations recorded in the Onondaga County Clerk's Office on October 29, 1970 in Liber 2439 of Deeds, at Page 34, December 18, 1970 in Liber 2442 of Deeds. at Page 289, January 26. 1984 in Liber 3067 of Deeds, at Page 275, April 9. 1984 in Liber 3082 of Deeds. at Page 188 and November 30, 1983 in Liber 3053 of Deeds, at page 252. Exhibit A SYRACUSE 2 DC PROPERTY - ---------------------- ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of VanBuren, County of Onondaga and State of New York and being a portion of Farm Lot #43, in said Town and being more particularly described as follows: BEGINNING at the intersection of the present southerly right of way line of lands of the New York State Thruway with the present westerly right of way line of Winchell Road; thence South 15(degree)-40'-08" West; along said westerly line of Winchell Road, a distance of 182.18 feet to a point of curvature in said westerly line; thence southerly, along said westerly line of Winchell Road, on a curve to the left, said curve having a radius of 494.75 feet, a distance of 117.52 feet to its intersection with the northerly line of property now or formerly owned by J.A. Winchell, as recorded in the Onondaga County Clerk's Office, in Liber of Deeds #2243, Page #1; thence North 74(degree)-13'-45" West, along said northerly line of said Winchell property, a distance of 502.48 feet to the northwesterly corner of said Winchell property; thence South 14(degree)-44' 37" West, along the westerly line of said Winchell property, a distance of 386.10 feet to the southwesterly corner of said Winchell property; thence South 73(degree)-47' -37" East, along the southerly line of said Winchell property, a distance of 357.32 feet to the northwesterly corner of property now or formerly owned by C. Monette, as recorded in the Onondaga County Clerk's Office, in Liber of Deeds #3296, Page #124; thence South 7(degree)-17'-37" East, along the westerly line of said Monette property and the westerly line of property now or formerly owned by D.P. Kolceski, as recorded in the Onondaga County Clerk's Office, in Liber of Deeds #3249, Page #160, a distance of 1134.66 feet to its intersection with the northerly right of way line of Walters Road; thence North 73(degree)-47'-37" West, along said northerly line of Walters Road, a distance of 239.40 feet to a point of curvature in said northerly line; thence westerly, along said northerly line of Walters Road, on a curve to the left, said curve having a radius of 1724.00 feet, a distance of 263.33 feet to a point of tangency in said northerly line; thence North 82(degree)-32'-43"West, along the northerly line of said Walters Road property, a distance of 857.15' feet to the northwesterly corner of said Walters Road property; thence North 16(degree)-30'-17" East, along said easterly line of said Humphrey property, a distance of 501.94 feet to the northeasterly corner of said property; thence North 73(degree)-29'-43" West, along the northerly line of said Humphrey property and the northerly line of property now or formerly owned by S & J Brykarz, as recorded in the Onondaga County Clerk's Office, in Liber of Deeds #2448, Page #418, a distance of 500.00 feet to its intersection with the westerly line of Farm Lot #43 and the northwesterly corner of said Brykarz property; thence North 16(degree)-30'-17" East, along said westerly of Farm Lot #43, a distance of 1106.76 feet to its intersection with said southerly line of said New York State Thruway; thence South 83(degree)-52'-46" East, along said southerly line of said New York State Thruway, a distance of 1530.31 feet to the place of beginning. Together with all rights and interest pursuant to the Permanent Easement Agreement dated August 21, 1992 and recorded February 2, 1993 in Liber 3824 at Page 22. Exhibit A DUBOIS 1 DC PROPERTY - -------------------- ALL THAT CERTAIN lot or piece of land in the City of DuBois, Clearfield County, Pennsylvania, bounded and described as follows, to-wit: BEGINNING at a point on the Northerly right of way line of Beaver Drive, said point being 2275.10 feet from the intersection of the right of way line of Beaver Drive and the right of way line of Shaffer Road (L.R. 402); thence by land of the City of DuBois and by a line parallel with the Western line of a parcel of land conveyed by the City of DuBois to the S. V. Corporation , now The Penn Traffic Company and recorded in Deed Book Volume 536, Page 524, North 20(degree) 24' 00" East, 247.67 feet to a point; thence by other land of the City of DuBois; and a line generally parallel with the Southern right-of-way line of the Consolidated Rail Corp. North 69(degree) 36' 00" West, 450.00 feet to a point; thence by land of the City of DuBois and a line parallel with the Western line of the S.V. Corporation, now The Penn Traffic Company, North 20(degree) 24' 00" East 854.38 feet to a point on the Southern right of way line of the Consolidated Rail Corp.; thence by the Southern right of way line of the Consolidated Rail Corp. by a chord through a 2(degree) 01' 54" curve to the right, South 71(degree) 33' 46" East, 193.16 feet to the P.T. of said curve, said point being 45.14 feet from the centerline of the Consolidated Rail Corp. right of way; thence by the Consolidated Rail Corp. right of way, South 69(degree) 36' 00" East 905.64 feet to the Northwest corner of a parcel of land conveyed by the City of DuBois to The Penn Traffic Company and recorded in Deed Book Volume 769, Page 114; thence by the Southern line of said parcel, South 53(degree) 29' 12" East 468.40 feet to a point on the western line of land of the S. V. Corporation, now The Penn Traffic Company; thence by the Western line of said parcel, South 20(degree) 24' 00" West 731.00 feet to a point at the Northeast corner of other land of the City of DuBois, said point also being North 20(degree) 24' 00" East 150.00 feet from the Northern right of way of Beaver Drive; thence by the North line of land of the City of DuBois and a line parallel with the Southern right of way line of the Consolidated Rail Corp., North 69(degree) 36' 00" West 1018.68 feet to a point; thence by the line of land of the City of DuBois and a line parallel with the Western line of the S. V. Corporation, now The Penn Traffic Company, South 20(degree) 24' 00" West 238.23 feet to a point on the Northern right of way line of Beaver Drive; thence by the right of way line of Beaver Drive, North 76(degree) 19' 26" West 80.56 feet to the place of BEGINNING. Map #7.3-031-000-10610 Exhibit A DUBOIS 2 DC PROPERTY - -------------------- ALL those certain pieces or parcels of land situate, lying and being in the City of DuBois, Clearfield County, Pennsylvania, being bounded and described as follows, to-wit: THE FIRST THEREOF: BEGINNING at an iron pipe, said iron pipe being at the intersection of the Southerly right of way line of the Pennsylvania Railroad and the Westerly legal right of way line of State Route No. 402, a/k/a Shaffer Road or State Route No. 4017; thence by the Westerly legal Right of Way line of State Route No. 402, the following courses and distances: South 24(degree) 45' 46" West 170.37 feet to a point; thence North 65(degree) 14' 4" West, 10 feet to a point; thence South 24(degree) 45' 46" West, 500 feet to a point; thence South 65(degree) 14' 4" East, 10 feet to a point; thence South 24(degree) 45' 46" West, 151.39 feet to a point; thence by the Northerly line of the Pennsylvania Electric Company, North 65(degree) 11' West, 239.81 feet to an iron pipe; thence by line of land of the City of DuBois, North 69(degree) 36' West 946.42 feet to an iron pipe; thence still by same North 20(degree) 24' East 820.57 feet to an iron pipe in the Southerly Right of Way line of the Pennsylvania Railroad; thence by the Southerly Right of Way line of the Pennsylvania Railroad, South 69(degree) 36' East 83.16 feet to an iron pipe; thence still by same, South 68(degree) 38' East 1165.04 feet to an iron pipe and the place of beginning. THE SECOND THEREOF: BEGINNING at an iron pipe in the Southerly Right of Way of the Pennsylvania Railroad, said point being the Northwest corner of a 23 acre parcel belonging to the Penn Traffic Company-Riverside Division; thence South 20(degree) 24' West 130 feet along Westerly line of Penn Traffic property; thence North 53(degree) 29' 12" West 468.4 feet to a point on Southerly right of way line of the Pennsylvania Railroad; thence South 69(degree) 36' East 450 feet along same Right of Way to an iron pipe and the place of beginning. THE THIRD THEREOF: BEGINNING at an iron pin, said iron pin being the Southwest corner of the existing property at the Riverside Division of the Penn Traffic Co.; thence by the Southerly line of the property of the Riverside Division of the Penn Traffic Co., property, South 69(degree) 36' East, 410.0 feet to a point; thence turning to the right along lands of the City of DuBois, South 20(degree) 24' West, 238.11 feet to a point on the Northerly Right of Way line of Beaver Drive; thence by the Northerly Right of Way line of Beaver Drive, North 63(degree) 39' 50" West, 412.21 feet to an iron pin; thence turning to the right by other lands of the City of DuBois, North 20(degree) 24' East, 195.48 feet to an iron pin and place of beginning. The above property descriptions are in accordance with the survey of Lee-Simpson Associates, Inc., dated April 21,1999, last revised on June 2,1999, and designated as File No. 39915021. Exhibit B FORM OF ASSIGNMENT OF INTANGIBLE PROPERTY ----------------------------------------- THIS ASSIGNMENT OF INTANGIBLE PROPERTY is executed as of this day of , 2005, by The Penn Traffic Company, a Delaware corporation ("Assignor"), in favor of Equity Industrial Partners Corp., a Massachusetts corporation ("Assignee"), pursuant to that certain Agreement for Sale and Leaseback dated as of December 22, 2004 (the "Purchase Agreement"), by and between Assignor, as Seller, and Assignee, as Buyer. FOR VALUE RECEIVED, Assignor hereby grants, conveys, transfers and assigns to Assignee all of Assignor's right, title and interest in, to and under the Intangible Property (as defined in the Purchase Agreement). Notwithstanding anything contained herein to the contrary, the Intangible Property being assigned pursuant to this Assignment of Intangible Property shall not include any intangible property used by Assignor in the ordinary course of the operation of its business, as presently conducted. Assignor hereby covenants that it will, at any time and from time to time upon written request therefor, execute and deliver to Assignee, its nominees, successors and/or assigns, any new or confirmatory instruments and do and perform any other acts which Assignee, its nominees, successors and/or assigns, may reasonably request in order to fully assign and transfer to and vest in Assignee, its nominees, successors and/or assigns, and protect its and/or their rights, title and interest in and enjoyment of, all of the Intangible Property, or to enable Assignee, its nominees, successors and/or assigns, to realize upon or otherwise enjoy the same. The provisions of this Assignment of Intangible Property shall be binding upon and inure to the benefit of Assignor, Assignee and their successors and assigns. [signature page to follow] IN WITNESS WHEREOF, the undersigned has executed this Assignment of Intangible Property as of the date first above written. "ASSIGNOR" THE PENN TRAFFIC COMPANY, a Delaware corporation By: /s/ ------------------------------ Name: Title: Exhibit C FORM OF LEASE ------------- [attached behind] Exhibit D FORM OF NON-FOREIGN CERTIFICATE To inform EQUITY INDUSTRIAL PARTNERS CORP., a Massachusetts corporation ("Transferee"), that withholding of tax under Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"), will not be required upon transfer of certain real property to Transferee by THE PENN TRAFFIC COMPANY, a Delaware corporation ("Transferor"), the undersigned hereby certifies the following on behalf of Transferor: 1. Transferor is not a foreign person, foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder). 2. Transferor's U.S. employer identification/social security number is as follows: 25-0716800. 3. Transferor's office address is: 1200 State Fair Boulevard, Syracuse, New York 13209. Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Transferor understands that Transferee is relying on this Certification in determining whether withholding is required upon said transfer. Transferor hereby agrees to indemnify, protect, defend (using counsel selected by Transferee) and hold Transferee harmless from and against any and all obligations, liabilities, claims, losses, actions, causes of action, rights, demands, damages, costs and expenses of every kind, nature or character whatsoever (including, without limitation, actual attorneys' and paralegals' fees and court costs) incurred by Transferee as a result of: (i) Transferor's failure to pay U.S. Federal income tax which the Transferor is required to pay under applicable U.S. law arising in connection with the subject transaction; or (ii) any false or misleading statement contained herein. Under penalty of perjury I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor. Dated: _________ __, 2005 The Penn Traffic Company, a Delaware corporation By: /s/ ---------------------------- Name: Title: Exhibit E WIRING INSTRUCTIONS ------------------- BANK: JP MORGAN CHASE 1166 AVENUE OF THE AMERICAS, 14TH FLOOR NEW YORK, NY 10036 BANK CONTACT: CAROLYN MCKENZIE (212) 899-2150 ABA NO.: 021 000 021 ACCOUNT NAME: FIRST AMERICAN TITLE INSURANCE COMPANY OF NEW YORK PREFERRED DIVISION ESCROW ACCOUNT NO.: 050-021931 REF.: TITLE NO./DEAL NAME: Penn Traffic Steve G. Rogers Exhibit F Form of Memorandum of Lease 1 ----------------------------- MEMORANDUM OF LEASE* THIS MEMORANDUM OF LEASE is made effective as of __, 2005 between EQUITY INDUSTRIAL PARTNERS CORP., a Massachusetts corporation ("Landlord"), with an address 145 Rosemary Street, Suite E, Needham, MA 02494, Attention: Donald Levine, and THE PENN TRAFFIC COMPANY, a Delaware corporation, ("Tenant") with an address at 1200 State Fair Boulevard, Syracuse, New York, 13209, Attention: General Counsel, who agree as follows: 1. Landlord leases to Tenant, and Tenant leases from Landlord, the real property (the "Premises") described in Exhibit A attached hereto. 2. This Memorandum of Lease is subject to the terms, conditions and provisions of that certain Lease (the "Lease") between Landlord and Tenant dated of even date herewith, which is incorporated herein by reference as though set out here in full. The Lease shall control in the event of any conflict with this Memorandum of Lease. 3. The primary term of the Lease is approximately fifteen (15) years, which term shall commence on even date herewith with renewal options as set forth in the Lease. 4. Tenant has certain rights to offer to purchase and to purchase the Premises pursuant to the Lease. [signature page to follow] - ----------------- * Subject to modifications required by local law. IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease effective as of the date first above written. "LANDLORD" EQUITY INDUSTRIAL PARTNERS CORP., a Massachusetts corporation By: /s/ --------------------------------- Name: Title: "TENANT" THE PENN TRAFFIC COMPANY, a Delaware corporation By: /s/ --------------------------------- Name: Title: Attach Acknowledgments Exhibit G EXCEPTIONS ---------- None. Exhibit H --------- SERVICE CONTRACTS ----------------- None. Exhibit I Acquisition Cost ---------------------------------------------------------------------- Property Allocated Purchase Price ---------------------------------------------------------------------- Jamestown DC Property $ 7,094,046 Syracuse 1 DC Property $11,444,810 Syracuse 2 DC Property $ 6,119,150 DuBois 1 DC Property $ 4,996,102 DuBois 2 DC Property $ 7,345,892 ---------------------------------------------------------------------- Purchase Price $37,000,000 ---------------------------------------------------------------------- Exhibit J PERMITTED ENCUMBRANCES ---------------------- JAMESTOWN DC PROPERTY - --------------------- NOTE: ITEMS NUMBERED 1, 2, 4, 7 AND 8 WILL CEASE TO BE PERMITTED ENCUMBRANCES AS OF THE CLOSING DATE. 1. A mortgage to secure an original principal indebtedness of $93,744,000.00, and any other amounts or obligations secured thereby, recorded on July 27, 1999 in Liber 2350 of Mortgages, Page 231. Dated: June 29, 1999 Mortgagor: The Penn Traffic Company Mortgagee: Fleet Capital Corporation 2. Town, County and School Taxes and Water and Sewer Rents in the years 2001 to 2003 inclusive. Town, County and School Taxes and Water and Sewer Rents for the current year. 3. Possible tax increase based on additional assessment made by reason of new construction or for any major improvements to the premises pursuant to provisions of Acts of Assembly relating thereto, not yet due or payable. 4. Subject to the Chapter 11 Petition for Relief under the United States Bankruptcy Code filed at Case Number: 03-22945 by The Penn Traffic Company in the United States Bankruptcy Court for the Southern District of New York. 5. Matters shown by ALTA/ACSM Land Title Survey made by Abate Engineering Associates. P.C. dated November 19, 2004. 6. Subject to permanent utility easement reserved by Chautauqua Development Company, Inc. in deed recorded April 1. 1993 in Liber 2289 of Deeds, Page 971. 7. Subject to UCC-1 Financing Statement filed July 27, 1999, File #1999-3575 given by The Penn Traffic Company (Debtor) to Fleet Capital Corporation, as Agent (Creditor). 8. Subject to UCC-1 Financing Statement filed August 30, 2004, File #2004-0335 from The Penn Traffic Company (Debtor) to Fleet Capital Corporation (Secured Party). 9. Subject to an easement of necessity for egress and ingress as set forth in Deed of County of Chautaugua Industrial Development Agency and The Penn Traffic Company, dated May 25, 1999 and recorded May 28, 1999 in Deed Book 2413, page 966. SYRACUSE 1 DC PROPERTY - ---------------------- NOTE: ITEMS NUMBERED 1, 2, 6, 7 AND 8 WILL CEASE TO BE PERMITTED ENCUMBRANCES AS OF THE CLOSING DATE. 1. A mortgage to secure an original principal indebtedness of $93,744,000.00, and any other amounts or obligations secured thereby, recorded on July 15, 1999 in Book 10290, Page 90. Dated: June 29, 1999 Mortgagor: The Penn Traffic Company Mortgagee: Fleet Capital Corporation 2. Town, County and School Taxes and Water and Sewer Rents in the years inclusive. 3. Town, County and School Taxes and Water and Sewer Rents for the current year. 4. Matters shown on ALTA/ACSM Land Title Survey made by Cottrell Land Surveyors, P.C. dated September 9, 2004. 5. Possible tax increase based on additional assessment made by reason of new construction or for any major improvements to the premises pursuant to provisions of Acts of Assembly relating thereto, not yet due or payable. 6. Subject to the Chapter 11 Petition for Relief under the United States Bankruptcy Code filed at Case Number: 03-22945 by The Penn Traffic Company in the United States Bankruptcy Court for the Southern District of New York. 7. UCC-1 Financing Statement filed July 16, 1999, File #99-06227 given by The Penn Traffic Company (Debtor) to Fleet Capital Corporation, as Agent (Creditor). 8. UCC-1 Financing Statement filed July 16. 1999, File #99-06228 given by The Penn Traffic Company (Debtor) to Fleet Capital Corporation, as Agent (Creditor). 9. Subject to utility easements granted to New York Telephone Company, doing business as NYNEX by instrument recorded in Liber 3978 of Deeds, at Page 89 on January 12, 1995. 10. Subject to utility easements granted to Niagara Mohawk Power Corporation by instrument recorded in Liber 3978 of Deeds, at Page 93 on January 12, 1995. 11. Subject to easements as reserved in deed recorded in Liber 3978 of Deeds, Page 97. 12. Claims to the land lying within the lines of Interstate 690. 13. Claims to the land lying within the lines of Walters Road. 14. Subject to easement for sewer to County of Onondaga by instrument recorded in Liber 2378 of Deeds, at Page 53 on June 26, 1968. 15. Subject to easement for sewer to County of Onondaga by instrument recorded in Liber 2378 of Deeds, at page 58 on June 26, 1968. 16. Claims to the land lying within the lines of Van Vleck Road. 17. Claims to the land lying within the lines of Walters Road. 18. Claims to the land lying within the lines of lnterstate 690. 19. Subject to Terms and Conditions of Option Agreement dated March 18, 1982 between P&C Food Markets, Inc. and Anheuser-Busch, Incorporated recorded March 19, 1982 in Liber 2929 of Deeds, at Page 1. Notice of Exercise of Option recorded April 22, 1982 in Liber 2934 of Deeds, at page 235. 20. Subject to easement to New York Transit Company recorded in Liber 1628 of Deeds, at page 619. 21. Subject to easement to West Side Sanitary District for the Lakeland Trunk Sewer as referenced in Deed recorded in Liber 2420 of Deeds, at page 416. SYRACUSE 2 DC PROPERTY - ---------------------- NOTE: ITEMS NUMBERED 1, 2, 8 AND 16 WILL CEASE TO BE PERMITTED ENCUMBRANCES AS OF THE CLOSING DATE. 1. A mortgage to secure an original principal indebtedness of $93,744,000.00, and any other amounts or obligations secured thereby, recorded on July 16, 1999 in Liber 10291 of Mortgages at Page 112 . Dated: June 29, 1999 Mortgagor: The Penn Traffic Company and Onondaga County Industrial Development Agency Mortgagee: Fleet Capital Corporation 2. Town, County and School Taxes and Water and Sewer Rents in the years 2001 to 2003 inclusive. 3. Town, County and School Taxes and Water and Sewer Rents for the current year. 4. Any variation in location of lines or dimensions or other matters which an accurate survey would disclose, provided the same does not materially and adversely affect the value of the property or materially interfere with the current use of the property. 5. Possible tax increase based on additional assessment made by reason of new construction or for any major improvements to the premises pursuant to provisions of Acts of Assembly relating thereto, not yet due or payable. 6. Payment In Lieu Of Tax Agreement dated October 22, 1992 between P & C Food Markets, Inc. and the Onondaga County Industrial Development Agency and that Agreement dated June 1, 1992 between Baldwinsville Central School District and P & C Food Markets, Inc.; provided, that all payments due thereunder are paid in full, with no defaults, actions or claims against the borrower. 7. Claims to lands lying within the bounds of any street or highway. 8. Subject to UCC-l Financing Statement filed July 16, 1999, File #1999-06252 given by The Penn Traffic Company (Debtor) to Fleet Capital Corporation, as Agent (Creditor). 9. Subject to Easement dated February 2, 1950 between Eva Jenda, surviving tenant by the entirety of Peter Jenda, deceased and Niagara Mohawk Power Corporation recorded February 18, 1950 at Liber 1429 in Liber of Deeds at Page 371. 10. Subject to Easement dated February 25, 1952 between Maurice J. Dewey and the Onondaga County Department of Public Works and recorded June 12, 1952 at Liber 1567 of Deeds at Page 413. 11. Subject to Easement dated October 16, 1953 between Eva Jenda Szwejk, formerly Eva Jenda and Niagara Mohawk Power Corporation and recorded October 31, 1953 at Liber 1657 of Deeds at Page 177. 12. Subject to Easement dated March 18, 1993 between P & C Food Markets, Inc., Onondaga County Industrial Development Agency and Niagara Mohawk Power Corporation and recorded April 22, 1993 in Liber 3839 of Deeds at Page 162. 13. Subject to Easement dated August 21, 1992 between P & C Food Markets, Inc, and Deborah S. Kolceski and recorded February 2, 1993 in Liber 3824 at Page 22. 14. Subject to Easement dated November 14, 1992 between P & C Food Markets, Inc. and Niagara Mohawk Power Corporation and recorded October 13, 1993 in Liber 3820 of Deeds at Page 130. 15. Subject to Easement dated August 3, 1992 between P & C Food Markets, Inc., Onondaga County Water Authority and Town of VanBuren and recorded September 10, 1992 in Liber 3791 of Deeds at Page 191. 16. Subject to the Chapter 11 Petition for Relief under the United States Bankruptcy Code filed at Case Number: 03-22945 by The Penn Traffic Company in the United States Bankruptcy Court for the Southern District of New York. DUBOIS 1 DC PROPERTY - -------------------- NOTE: ITEMS NUMBERED 1, 2, 3, 4, 9, 10, 11, 17, 18, 19, 20, 21 AND 22 WILL CEASE TO BE PERMITTED ENCUMBRANCES AS OF THE CLOSING DATE. 1. A mortgage to secure an original principal indebtedness of $7,300,000.00, and any other amounts or obligations secured thereby, recorded on December 16, 1986 in Record Book Volume 1128, Page 490. Dated: December 1, 1986 Mortgagor: Clearfield County Industrial Development Authority Mortgagee: Pittsburgh National Bank As assigned to Algemene Bank, Nederland, N.V. by assignment recorded March 4, 1991 as Record Book 1387, Page 366 . Partial Release and Modificiation of Mortgage and Security Agreement recorded April 24, 1992 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1456, Page 189. 2. A mortgage to secure an original principal indebtedness of $488,000.00, and any other amounts or obligations secured thereby, recorded on September 21, 1989 in Record Book Volume 1183, Page 70 . Dated: August 17, 1987 Mortgagor: Clearfield County Industrial Development Authority and The Penn Traffic Company Mortgagee: City of DuBois A document recorded December 29, 1987 as Record Book Volume 1200, Page 498 of Official Records provides that the lien or charge of the deed of trust was subordinated to the lien or charge of the deed of trust recorded September 21, 1989 as Record Book Volume 1183, Page 70 of Official Records. 3. A mortgage to secure an original principal indebtedness of $60,740.00, and any other amounts or obligations secured thereby, recorded on December 16, 1986 in Record Book Volume 1128, Page 510 . Dated: December 1, 1986 Mortgagor: Clearfield County Industrial Development Authority Mortgagee: The Penn Traffic Company 4. Town, County and School Taxes and Water and Sewer Rents in the years 2001 to 2003 inclusive. 5. Town, County and School Taxes and Water and Sewer Rents for the current year. 6. Coal and mining rights and all rights related thereto. 7. Any variation in location of lines or dimensions or other matters which an accurate survey would disclose, provided the same does not materially and adversely affect the value of the property or materially interfere with the current use of the property. 8. Possible tax increase based on additional assessment made by reason of new construction or for any major improvements to the premises pursuant to provisions of Acts of Assembly relating thereto, not yet due or payable. 9. Subject to the Chapter 11 Petition for Relief under the United States Bankruptcy Code filed at Case Number: 03-22945 by The Penn Traffic Company in the United States Bankruptcy Court for the Southern District of New York. 10. A certified copy of a judgment or an abstract thereof, recorded August 7, 2001 as: Court: Court of Common Pleas of Clearfield County, Pennsylvania Case No.: #2000-1121 Debtor: The Penn Traffic Company Creditor: Lillian J. Kanary Amount: $$17,500.00, and any other amounts due thereunder. 11. A financing statement recorded January 22, 1987 as #3442-1987. Debtor: The Penn Traffic Company Secured party: Clearfield County Industrial Development Authority Assignment and Amendment recorded March 21, 1991 Continuation recorded August 19, 1991 Miscellaneous filing on September 12, 1991 Continuation recorded December 13, 1991 Assignment recorded April 28, 1992 Continuation recorded November 15, 1996 Assignment recorded December 14, 2001 Continuation recorded December 14, 2001 12. Subject to the following rights of way as shown on Plan of Survey prepared by Sheldon W. Spigelmyer, Registered Land Surveyor, dated September 15, 1986, last revised October 29, 1986: a. From the City of DuBois to the Pennsylvania Electric Company by instrument dated October 25, 1948 and recorded in the Recorder's Office of Clearfield County, Pennsylvania in Miscellaneous Book 72, Page 177. b. From the City of DuBois to the Pennsylvania Electric Company by instrument dated November 28, 1978 and recorded in the Recorder's Office of Clearfield County, Pennsylvania in Miscellaneous Book 218, Page 356. 13. Exact location of the right of way of Consolidated Rail Corporation with respect to cuts, slopes and fills is unknown. 14. Subject to City of DuBois water line across the Northerly property line as shown on Plan of Survey prepared by Sheldon W. Spigelmyers, Registered Land Surveyor, dated September 15, 1986, last revised October 29, 1986. 15. Subject to the following covenants and conditions in deed from City of DuBois to Clearfield County Industrial Development Authority dated August 27, 1986 and recorded September 3, 1986 in Deeds and Record Book Volume 1105, Page 228, viz: a. Building and application procedure requirements as set forth in the Industrial Park regulations shall be followed with no exceptions. b. Within one (1) year of completion of construction of the stipulated building , all areas of the above described land act paved for driveways or parking, excepting the unfilled are, shall be planted in grass and shrubbery. 16. Subject to right of way from The Penn Traffic Company to The City of DuBois dated July 9, 1992 and recorded August 19, 1992 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1479, Page 90. 17. Subject to Memorandum of Lease between Clearfield County Industrial Development Authority and The Penn Traffic Company dated December 1, 1986 and recorded December 16, 1986 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1128, Page 519. 18. Subject to Pledge and Assignment from Clearfield County Industrial Development Authority to Pittsburgh National Bank, as Trustee and Chase Lincoln First Bank, N.A. dated December 1, 1986 and recorded December 16, 1986 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1128, Page 525. 19. Subject to Pledge and Assignment with Acknowledgment thereof by The Penn Traffic Company between Clearfield County Industrial Development Authority to Algemene Bank Nederland N.V. dated March 1, 1991 and recorded March 4, 1991 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1387, Page 393. 20. Subject to Affidavit of Patrick J. Reilly, Secretary of DuBois Area Economic Development Corporation dated November 5, 1986 and recorded December 16, 1986 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1128, Page 539. 21. Subject to Affidavit of Leo C. Karoleski, Mayor of the City of DuBois, dated December 10, 1986 and recorded December 16, 1986 in the Recorder's Office of Clearfield County, Pennsylvania in Record Book Volume 1128, Page 542. 22. Subject to Mortgage and Security Agreement from Clearfield County Industrial Development Authority to Chase Lincoln First Bank, N.A. in the principal sum of $995,000.00 dated as of December 1, 1986 and recorded December 16, 1986 in the Recorder's Office of Clearfield County, Pennsylvania in Deed and Record Book Volume 1128, Page 472. DUBOIS 2 DC PROPERTY - -------------------- NOTE: ITEMS NUMBERED 1, 2, 6, 7 AND 8 WILL CEASE TO BE PERMITTED ENCUMBRANCES AS OF THE CLOSING DATE. 1. A mortgage to secure an original principal indebtedness of $320,000,000.00, and any other amounts or obligations secured thereby, recorded on July 6, 1999 in Instrument Number: 199911121. Dated: June 29, 1999 Mortgagor: The Penn Traffic Company, a Delaware Corporation Mortgagee: Fleet Capital Corporation 2. Town, County and School Taxes and Water and Sewer Rents in the years 2001 to 2003 inclusive. 3. Town, County and School Taxes and Water and Sewer Rents for the current year. 4. Coal and mining rights and all rights related thereto. 5. Possible tax increase based on additional assessment made by reason of new construction or for any major improvements to the premises pursuant to provisions of Acts of Assembly relating thereto, not yet due or payable. 6. Subject to the Chapter 11 Petition for Relief under the United States Bankruptcy Code filed at Case Number: 03-22945 by The Penn Traffic Company in the United States Bankruptcy Court for the Southern District of New York. 7. Judgment Lien entered in favor of Lillian J. Kanary and against The Penn Traffic Company on August 17, 2001 at Case Number: 2000-1121 in the amount of $17,500.00. 8. UCC-1 Financing Statement between Sunrise Properties, Inc., c/o the Penn Traffic Company, Debtor, and Fleet Capital Corporation, as Agent, Secured Party, recorded on July 6, 1999 in the Office of the Recorder of Deeds of Clearfield County, Pennsylvania as Instrument Number 199911122. Assignment to PNC Bank, National Association, formerly Pittsburgh National Bank, filed on December 14, 2001 at Number: 200120128. Continuation filed on December 14, 2001 t Number: 200120129. 9. Subject to all roads, public or private, affecting the premises and the rights of others therein. 10. Subject to all matters set forth on survey of Lee-Simpson Associates, Inc., dated April 21, 1999, last revised on June 2, 1999. 11. Subject to a Right of Way to The Buffalo and Pittsburgh Railroad, formerly Pennsylvania Railroad, including easements for cuts, fills, slopes and drains. 12. Subject to the covenants, conditions and restrictions set forth in Deed Book Volume 536, page 524, and Deed Book Volume 487, page 10. 13. Subject to the following Rights of Way: a. The Penn Traffic Company-Riverside Division to Pennsylvania Electric Company, dated July 21, 1992, and recorded January 29, 1993, in the Recorder's Office of Clearfield County, Pennsylvania, in Volume 1511, page 514, for electric line. b. The Penn Traffic Company to The City of DuBois, dated June 2, 1998, and recorded March 17, 1999, in the Recorder's Office of Clearfield County, Pennsylvania, at No. 199904079, for construction and maintenance of proposed concrete curb and sidewalk. c. City of DuBois to Pennsylvania Electric Company, dated February 2, 1953 and recorded April 22, 1953, in Misc. Book 87, page 475, for electric line. d. City of DuBois to United Natural Company, dated September 10, 1958 and recorded October 24, 1958, in Misc. Book 113, page 88, for pipeline. e. DuBois City to Pennsylvania Electric Company, dated July 31, 1962 and recorded October 3, 1962, in Misc. Book 130, page 439, for electric line. f. Penn Traffic Company to The Bell Telephone Company of Pennsylvania, recorded July 17, 1968, in Misc. Book 147, page 224, for communication lines. g. City of DuBois to Pennsylvania Electric Company, dated November 28, 1978 and recorded January 12, 1979, in Misc. Book 218, page 356, for Electric line. h. Consent, Subordination and Assumption Agreement between DuBois Board of Trade and The Penn Traffic Company, dated March 30, 1979, and recorded August 3, 1979, at Misc. Book 221, page 485, for electric line. i. Right of Way recorded in Deed Book Volume 779, Page 433. 14. Oil and Gas Lease from City of DuBois to Kewanee Oil Company, dated March 17, 1960 and recorded April 21, 1960, in Misc. Book 120, page 443. 15. Oil and Gas Lease between the City of DuBois and The Kewanee Oil Company as directed and ordered by Order of Court, dated April 21, 1960 pursuant to Equity #4, February Term 1960 with respect to property described in Deed Book Volume 300, page 556. 16. Oil and Gas Lease between the City of DuBois and the Kewanee Oil Company as directed and ordered by Order of Court, dated April 21, 1960 pursuant to Equity #5, February Term, 1960 with respect to property described in Deed Book Volume 300, page 552. Exhibit K SURVEYS, PROPERTY CONDITION ASSESSMENT REPORTS AND PHASE I ENVIRONMENTAL REPORTS ---------------------------------------------- JAMESTOWN DC PROPERTY - --------------------- Phase I Environmental Condition Report prepared by Environmental Compliance Services, Inc. dated November 2004. Property Condition Report prepared by Environmental Compliance Services, Inc. dated November 2004. ALTA/ACSM Land Title Survey made by Abate Engineering Associates. P.C., dated November 19, 2004. SYRACUSE 1 DC PROPERTY - ---------------------- Phase I Environmental Condition Report prepared by Environmental Compliance Services, Inc. dated November 2004. Property Condition Report prepared by Environmental Compliance Services, Inc. dated November 2004. ALTA/ACSM Land Title Survey made by Cottrell Land Surveyors, P.C dated May 21, 1999. ALTA/ACSM Land Title Survey made by Cottrell Land Surveyors, P.C dated September 9, 2004. SYRACUSE 2 DC PROPERTY - ---------------------- Phase I Environmental Condition Report prepared by Environmental Compliance Services, Inc. dated November 2004. Property Condition Report prepared by Environmental Compliance Services, Inc. dated November 2004. ALTA/ACSM Land Title Survey made by Cottrell Land Surveyors, P.C dated April 16, 1999, revised June 18, 1999. DUBOIS 1 DC PROPERTY - -------------------- Phase I Environmental Condition Report prepared by Environmental Compliance Services, Inc. dated October 2004. Property Condition Report prepared by Environmental Compliance Services, Inc. dated October 2004. ALTA/ACSM Land Title Survey made by Lee-Simpson Associates dated December 2004 (to be provided after the date hereof). DUBOIS 2 DC PROPERTY - -------------------- Phase I Environmental Condition Report prepared by Environmental Compliance Services, Inc. dated October 2004. Property Condition Report prepared by Environmental Compliance Services, Inc. dated October 2004. ALTA/ACSM Land Title Survey made by Lee-Simpson Associates dated October 21, 2004. PLAN SCHEDULE 5.16 ------------------ PLAN SCHEDULE 5.16 PROPOSED TERMS OF POST-EFFECTIVE DATE TRADE LIEN PROGRAM Pursuant to the First Amended Joint Plan of Reorganization (the "Plan"), dated February 4, 2005, for The Penn Traffic Company (the "Reorganized Debtor Representative") and its Affiliated Debtors (collectively, the "Debtors"), the Debtors intend to seek approval of a post-effective date trade lien program (the "Post-Effective Date Trade Lien Program") on substantially the terms and conditions set forth below. The terms and conditions as well as the effectiveness of the Post-Effective Date Trade Lien Program are subject in all respect to the negotiation and execution of definitive documentation in respect thereof (the "Trade Lien Documents"), including a collateral trust agreement (the "CTA") and an intercreditor and subordination agreement (the "Intercreditor Agreement") in favor of the lenders (the "Exit Lenders") party to the post-effective date financing facilities (including any replacements or refinancings thereof, the "Exit Facilities") to be entered into by the Reorganized Debtors upon the Effective Date of the Plan. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. In the event of a conflict between the provisions set forth below and in the Trade Lien Documents, the terms of the Trade Lien Documents shall prevail.
PRINCIPAL TERMS/DEFINITIONS - -------------------------------------------------------------------------------------------------- Eligible Vendor: A trade vendor who (i) provides Subject Inventory or Other Services to any Reorganized Debtor on Minimum Trade Terms during the Term (as defined below), (ii) executes a letter agreement setting forth the applicable Minimum Trade Terms in a form reasonably acceptable to the Reorganized Debtor Representative and the Creditor's' Committee or, if post-Effective Date, the Trade Lien Collateral Agent (the "Letter Agreement") on or before the Deadline (as defined below) and (iii) otherwise complies with the terms and conditions of the Trade Lien Documents, including the notice provisions described below under the heading "Opting Out." "Deadline" shall mean July 1, 2005 or such later date as may be agreed to by the Reorganized Debtors, the Trade Lien Collateral Agent and the subject vendor. - -------------------------------------------------------------------------------------------------- Subject Inventory: Any "inventory" (as defined in the Uniform Commercial Code in the State of New York) sold to a Reorganized Debtor, other than inventory (x)
2
- -------------------------------------------------------------------------------------------------- sold on a consignment or sale on approval basis or (z) which is otherwise supported by a letter of credit, bankers' acceptance or other form of security (excluding any surety bond issued under PACA). - -------------------------------------------------------------------------------------------------- Other Services: Any services provided by a service vendor to a Reorganized Debtor on a regular basis and in the ordinary course of business, including printing services in respect of the Reorganized Debtors' weekly circulars and other like services. - -------------------------------------------------------------------------------------------------- Secured Trade Claims: All amounts validly due and owing by a Reorganized Debtor to any Eligible Vendor with respect to the sale of Subject Inventory or the provision of Other Services, in each case, on Minimum Trade Terms during the Term. In addition, any Trade Lien Claim that remains unpaid as of the Effective Date as well as the PBGC Allowed Administrative Claim shall be considered a Secured Trade Claim hereunder entitled to the benefits of the Post-Effective Trade Lien. - -------------------------------------------------------------------------------------------------- Opting Out: Nothing herein or in the Trade Lien Documents shall prohibit an otherwise Eligible Vendor from terminating its participation in the Post-Effective Date Trade Lien Program; PROVIDED, that to do so such vendor must (i) give the Reorganized Debtor Representative at least 10 business days' prior notice (the "Notice Period") of its decision to no longer offer Minimum Trade Terms or otherwise not to participate in the program and (ii) continue to provide Subject Inventory or Other Services, as the case may be, to the Reorganized Debtors consistent with prior practice on Minimum Trade Terms during such Notice Period. If such notice is not provided, then the Reorganized Debtors (or any relevant estate representative) may treat as unsecured and not entitled to the benefit of the Post-Effective Date Trade Lien any and all amounts due and owing to such vendor for Inventory or Other Services provided to the Reorganized Debtors during the 10 business day period preceding the Vendor Termination Date (as defined below) (the "Excluded Claims"). The
3
- -------------------------------------------------------------------------------------------------- "Vendor Termination Date" for any particular vendor shall be the date in which it refuses to provide the Reorganized Debtors with Minimum Trade Terms in accordance with the Letter Agreement. Notwithstanding the foregoing, no vendor will be required to comply with the foregoing notice requirements following a Termination Event. Other than with respect to Excluded Claims, if a vendor shall cease to be an Eligible Vendor for any reason during the Term, all Secured Trade Claims unpaid as of such termination shall continue to be secured by the Post-Effective Date Trade Lien until such Secured Trade Claims have been paid in full. - -------------------------------------------------------------------------------------------------- Minimum Trade Terms: Trade credit on terms mutually acceptable to the Reorganized Debtors and the particular vendor; PROVIDED that such trade terms shall be (i) as to number of days, an amount at least equal to the lesser of (x) 30 days or (y) the average number of days of trade credit offered by the relevant vendor to the Reorganized Debtors (or, for new vendors, to its regular customers of comparable size) for the period beginning one year prior to the Petition Date and ending 45 days prior to the Petition Date (the "Subject Period") (or such number of days as shall be mutually acceptable to the Reorganized Debtor and the subject vendor), (ii) as to amount, shall mean that such vendor has made available to the Reorganized Debtors a revolving line of trade credit in an amount consistent with prior practice during the Subject Period or, if less, is in an amount sufficient to satisfy the Reorganized Debtors' post-Effective Date trade requirements with respect to such vendor in the ordinary course of business and (iii) shall include such cash discounts, allowances and other applicable credit programs as are offered by such vendor in the normal course of its business to its regular non-delinquent customers of comparable size, all of which shall be set forth in the Letter Agreement (as defined below). Notwithstanding the foregoing, in no event shall Minimum Trade Terms be less (in days and in amount) than that which was offered by such vendor to the Debtors
4
- -------------------------------------------------------------------------------------------------- during the pendency of the Cases. - -------------------------------------------------------------------------------------------------- Trade Lien Collateral Agent: ___________, acting as collateral trustee for the Eligible Vendors, or such other person or entity reasonably acceptable to the Reorganized Debtor Representative and the Creditors' Committee (or, if post-Effective Date, the outgoing Trade Lien Collateral Agent). - -------------------------------------------------------------------------------------------------- Trade Lien Collateral: All or substantially all of the Debtors' personal property and owned real property that is otherwise subject to an Exit Facility Lien (the "Trade Lien Collateral"), provided that in no event shall such Trade Lien Collateral include any and all leases of real property or such other property expressly excluded under the terms of the Trade Lien Documents. - -------------------------------------------------------------------------------------------------- Security Documents: The Reorganized Debtors shall execute in favor of the Trade Lien Collateral Agent such mortgages and security agreements in favor of the Trade Lien Collateral Agent as are necessary and appropriate to create a valid lien on the Trade Lien Collateral and in such form as is reasonably satisfactory to the Reorganized Debtor Representative, the Trade Lien Collateral Trustee (if one has been appointed), the Creditors Committee and the agents for the Exit Lenders (the "Exit Facility Agents"). Except to the extent available in connection with the Exit Facilities, the Reorganized Debtors shall not be required to obtain appraisals, surveys, environmental review, legal opinions or title insurance (unless the cost thereof to the Reorganized Debtors is de minimus) in connection with any such security documents, and no leasehold mortgages, assignments of lease, landlord consents, bailee letters and the like shall be required in connection therewith. - -------------------------------------------------------------------------------------------------- Lien Priority: The Reorganized Debtors shall grant to the Trade Lien Collateral Agent for the PARI PASSU benefit of all holders of Secured Trade Claims a lien on all of the Trade Lien Collateral whether now existing or hereafter created (the "Post-Effective Date Trade Liens"), which Post-Effective Date Trade Lien shall be junior and subordinate to the Exit Facility
5
- -------------------------------------------------------------------------------------------------- Liens and to certain senior permitted liens, all as more fully set forth in and subject to the terms of the Trade Lien Documents, including the Intercreditor Agreement. The Trade Lien Collateral may be subject to other permitted liens to the extent permitted under any of the Exit Facilities, but such other permitted liens shall have priority over the Post-Effective Date Trade Lien only to the extent such other permitted liens would have priority over the Exit Facility Liens. - -------------------------------------------------------------------------------------------------- Subordination: To the extent, and except as otherwise provided in, the Trade Lien Documents, all Secured Trade Claims shall be junior and subordinate to all obligations outstanding from time to time under the Exit Facilities, but senior to any present or future claim, right or interest that a Creditor receiving a distribution under the Plan has in or to property of any Reorganized Debtor (other than an Exit Facility Lien or a lien permitted under the Trade Lien Documents). - -------------------------------------------------------------------------------------------------- Reporting: The Reorganized Debtors shall provide periodic reports to the Trade Lien Collateral Agent as provided in the Trade Lien Documents. To the extent provided for under the Trade Lien Documents, the Trade Lien Collateral Agent or the Reorganized Debtor Representative may provide certain periodic information to an Eligible Vendor or service provider who requests a copy and executes a confidentiality and non-trading agreement in form and substance reasonably satisfactory to the Reorganized Debtor Representative. - -------------------------------------------------------------------------------------------------- Releases: The Post-Effective Date Trade Lien on any Trade Lien Collateral shall be automatically released and discharged if any such Trade Collateral is sold or otherwise disposed of in a transaction permitted under the Exit Facilities or otherwise consented to by the requisite Exit Lenders; PROVIDED that such Post-Effective Date Trade Lien shall attach to any net proceeds of any Trade Lien Collateral on the terms and conditions set forth in the Trade Lien Documents, including the Intercreditor Agreement. Upon the Remedies Effective Date (as defined
6
- -------------------------------------------------------------------------------------------------- below), but subject in all respects to the Trade Lien Documents, including the Intercreditor Agreement, the balance of any proceeds from the sale or other disposition of any Trade Lien Collateral shall be held by the Trade Lien Collateral Agent in a reserve account for the pro rata benefit of all holders of Secured Trade Claims. The Trade Lien Collateral Agent shall have the right to surcharge such reserve for any costs and expenses incurred by it in connection with the enforcement of remedies, including any costs and expenses incurred in connection with the disposition of any Trade Lien Collateral. - -------------------------------------------------------------------------------------------------- Foreclosure Remedies: The Trade Lien Collateral Agent shall have sole power and authority to act on behalf of all holders of Secured Trade Claims with respect to, among other things, the enforcement of remedies as if it were the secured party with all rights and powers accorded to secured creditors under the Uniform Commercial Code or other applicable law. As further set forth in, and subject to the terms of, the Trade Lien Documents, including the Intercreditor Agreement, the Trade Lien Collateral Agent shall not be entitled to exercise any foreclosure or other remedies hereunder or with respect to the Trade Lien Collateral until (x) all obligations under the Exit Facilities shall have been repaid in full in cash, including the cash collateralization of all outstanding letters of credit, and the commitments thereunder have been terminated and (y) following such repayment, at least five (5) business days' prior written notice has been given to the Reorganized Debtor's Representative (the "Remedies Effective Date"). As further set forth in, and subject to the terms of, the Trade Lien Documents, including the Intercreditor Agreement, nothing herein shall obligate any Exit Facility Agent or any Exit Lender to take any particular action or inaction with respect to any of the Trade Lien Collateral, including the marshalling of assets. - -------------------------------------------------------------------------------------------------- Term/Termination of Post-Effective The term (the "Term") of the Post-Effective Date Trade Lien Trade Lien Program: Program shall commence on the Effective Date and end on the [eighteen (18)
7
- -------------------------------------------------------------------------------------------------- month] anniversary of the Effective Date (or such later date as may be agreed to by the Reorganized Debtors and the Trade Lien Collateral Agent, but in no event later than the second anniversary of the Effective Date); PROVIDED, that the Post-Effective Date Trade Lien Program contemplated hereunder may be terminated early (a "Termination Event") upon the earlier of (i) at any time following the first anniversary of the Effective Date, at the election of the Reorganized Debtors, upon not less than 45 days prior written notice to the Trade Lien Collateral Agent and the holders of Secured Trade Claims (at their last known addresses), (ii) the entry of an order for relief in any bankruptcy or insolvency proceeding against any Reorganized Debtor (other than a Reorganized Debtor having no material operations) and (iii) the cessation of the Reorganized Debtors' businesses. Notwithstanding the termination of the Post-Effective Date Trade Lien Program, the validity and priority of the Post-Effective Date Trade Lien shall remain in full force and effect and will not be released or discharged until all Secured Trade Claims have been paid in full or adequate provisions reasonably acceptable to the Trade Lien Collateral Agent have been made for the prompt repayment in full of all such Secured Trade Claims. - --------------------------------------------------------------------------------------------------
PLAN SCHEDULE 8.6
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Claims by the Debtors against the following vendors for, INTER ALIA, monies due and owing on account of prepayments, overpayments, allowances, rebates or other amounts due for which the Debtors have not received payment: - ----------------------------------------------------------------------------------------------------------------------- A & M Cleaning Pro. Giovanni Food Co. Inc. Painter Distributing - ----------------------------------------------------------------------------------------------------------------------- A D G Glaxosmith Kline Palermo's Frozen Pizza - ----------------------------------------------------------------------------------------------------------------------- A L George Inc. Glazersdistributor Palm Bay Imports - ----------------------------------------------------------------------------------------------------------------------- A Sweet Occasion Globalhousehold Palmer Candy Co. - ----------------------------------------------------------------------------------------------------------------------- A.P. Deauville, LLC Glory Foods Inc. Palmyra Bologna - ----------------------------------------------------------------------------------------------------------------------- AAA Restaurant & Equipment Goetze Candy Co Inc. Pameco Syracuse - ----------------------------------------------------------------------------------------------------------------------- Abbott Foods Gold Kist Inc. Panarama Inc. - ----------------------------------------------------------------------------------------------------------------------- Abbott Laboratories Golden Books Pub. Panasonic Industrial Co. - ----------------------------------------------------------------------------------------------------------------------- Aberfoylesprings Good Housekeeping Paper Mate - ----------------------------------------------------------------------------------------------------------------------- Absolut Marketing Inc. Good Humor-Breyers L.C. Papermagicgroup - ----------------------------------------------------------------------------------------------------------------------- Ace Bayou Corp. Goodmark Foods Inc. PAR Group - ----------------------------------------------------------------------------------------------------------------------- Ach Food Companies, Inc. Gorton Co. Paradise Inc. - ----------------------------------------------------------------------------------------------------------------------- Acme United Corporation Gourmet Boutique, LLC Paramount Farms - ----------------------------------------------------------------------------------------------------------------------- Acmeinternation GPX Inc. Parco Foods, L.L.C. - ----------------------------------------------------------------------------------------------------------------------- Adg Graciousliving Paris Accessories, Inc. - ----------------------------------------------------------------------------------------------------------------------- Adirondack Beverages Graeter's Ice Cream Paris Business Products - ----------------------------------------------------------------------------------------------------------------------- Adirondack Maple Farms Grand-Bay Foods Parispresents - ----------------------------------------------------------------------------------------------------------------------- Advance Publishers Grandma Brown's Beans Inc. Park Farms - ----------------------------------------------------------------------------------------------------------------------- Advanced Fire Protection Inc. Granprixelectro Parkavenue - ----------------------------------------------------------------------------------------------------------------------- Advanced Medical Optics Gravy Master Co. Parmalat USA Corp. - ----------------------------------------------------------------------------------------------------------------------- Advanced Research Laboratories Great American Herb Co. Par-Pak Ltd. - ----------------------------------------------------------------------------------------------------------------------- Advanced Vision Great Lakes Cheese Company, Inc. Party Source - ----------------------------------------------------------------------------------------------------------------------- Advantage Sales & Marketing Great Lakes Kraut Co. Llc Pasta Fresca - ----------------------------------------------------------------------------------------------------------------------- Aep Industries Inc. Great Northern Products Pasturized Eggs - ----------------------------------------------------------------------------------------------------------------------- Aidell's Sausage Greatlakesscrip Patriot - ----------------------------------------------------------------------------------------------------------------------- Aim Corrugated Container Corp. Green Bay Dressed Beef Pbm Products - ----------------------------------------------------------------------------------------------------------------------- AJM Packaging Green Pharmaceuticals PDK Worldwide Enterprises, Inc. - ----------------------------------------------------------------------------------------------------------------------- Akpharma Inc. Griffith Energy Pearson Candy Co. - ----------------------------------------------------------------------------------------------------------------------- Alamance Foods Inc. Gristmill Pennant Fruit Products Inc. - ----------------------------------------------------------------------------------------------------------------------- Alaskan Falls Water Co. Ltd. Groupe Seb USA Penobscot Frozen Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Alberto Culver Grunerd Jahr USA Pentech - ----------------------------------------------------------------------------------------------------------------------- Alcon Laboratories Inc. GSA Peoriaplastics - ----------------------------------------------------------------------------------------------------------------------- Alexander Global Promotions Gtt International Inc. Pepsi Cola Btlg Co-Elmira - ----------------------------------------------------------------------------------------------------------------------- Alfresh Foods Guiness Bass Imports Pepsi North Country Vending - ----------------------------------------------------------------------------------------------------------------------- Allegany Beverage Corp. Guttenplan's Bakery Pepsico Foods Imports - ----------------------------------------------------------------------------------------------------------------------- Alleghany Pharmacal Corp. Gwaltney Of Smithfield Ltd. Pepsi-Cola Company - ----------------------------------------------------------------------------------------------------------------------- Allen Canning Co. H C Brill Co. Inc. Perfect Art - ----------------------------------------------------------------------------------------------------------------------- Allergan Inc. H.T. Redemption Center Perfection Bakeries, Inc. - ----------------------------------------------------------------------------------------------------------------------- Allied Domecq Wines USA Hachette Inc. Perfetti Van Melle USA - ----------------------------------------------------------------------------------------------------------------------- Allied Old English Inc. Hain Celestiao Group Performance Labs - ----------------------------------------------------------------------------------------------------------------------- Allied Supply Co. Hamilton News Co Inc. Performark, Inc. - ----------------------------------------------------------------------------------------------------------------------- Alliedinternati Hanover Foods Corporation Perio, Inc. - ----------------------------------------------------------------------------------------------------------------------- Alliedsales Hansen's Natural Beverages Perioproducts - ----------------------------------------------------------------------------------------------------------------------- Alltrista Consumer Products Co. Happy Ice Corp. Perkins Food - ----------------------------------------------------------------------------------------------------------------------- Alltrista Corp. Harmonassociate Perry's Ice Cream - ----------------------------------------------------------------------------------------------------------------------- Almaden Vineyards Hartz Mountain Corp. Personalcarepro - ----------------------------------------------------------------------------------------------------------------------- Harvest Ventures, Inc. Petals Distributing Company - ----------------------------------------------------------------------------------------------------------------------- Alsey/Emess Lighting Harvest View Farm Market Pezcandy - ----------------------------------------------------------------------------------------------------------------------- Altadis U.S.A. Hasbro Pharmacia & Upjohn - ----------------------------------------------------------------------------------------------------------------------- American Candy Mfg. Hatfield Quality Meats Inc. Pharmaton Natural Health - ----------------------------------------------------------------------------------------------------------------------- American Connoisseur Health Care Products Pharmavite Corporation - ----------------------------------------------------------------------------------------------------------------------- American Dairy Brands Health Product Tech. PHD - -----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- American Food Group Healthguard International, Inc. Philadelphiache - ----------------------------------------------------------------------------------------------------------------------- American Licorice Co. Health-Tech Inc. Philip Morris Co. - ----------------------------------------------------------------------------------------------------------------------- American Media Inc. Hebertcandies Phillips Foods, Inc. - ----------------------------------------------------------------------------------------------------------------------- American Nutrition Hedstrom Physiciansformu - ----------------------------------------------------------------------------------------------------------------------- American Pie Heinz Frozen Food Company Pic Corp. - ----------------------------------------------------------------------------------------------------------------------- American Popcorn Co. Heinz Pet Products Co. Pictsweet Frozen Foods - ----------------------------------------------------------------------------------------------------------------------- American Sugar Refining Co. Heinz USA Pierre's - ----------------------------------------------------------------------------------------------------------------------- Americanimporti Helenecurtis Pik Nik Foods, USA - ----------------------------------------------------------------------------------------------------------------------- Americanitalian Helman Group Pilgrims Pride Corporation - ----------------------------------------------------------------------------------------------------------------------- Amerifit Nutrition Heluva Good Cheese Inc. Pinemountain - ----------------------------------------------------------------------------------------------------------------------- Amerisource Funding Inc. Henkel Consumer Adhesives, Inc. Pinnacle Foods Corp. - ----------------------------------------------------------------------------------------------------------------------- Ameriwood Henny Penny Farms Pinnakle/San Diego - ----------------------------------------------------------------------------------------------------------------------- Amurol Confections Co. Herbert Stanley Pioneer Flour Mills - ----------------------------------------------------------------------------------------------------------------------- Anchor Frozen Food Corp. Heritage Consumer Products Pjsquares - ----------------------------------------------------------------------------------------------------------------------- Anchor Home Products Heritage Food Serv Equip. Inc. Pl Developments - ----------------------------------------------------------------------------------------------------------------------- Anderson Bakery Co Inc. Herky's Food Products Inc. Plano Molding - ----------------------------------------------------------------------------------------------------------------------- Andersonpretzel Herman Falter Packing Co. Plattsburgh Dist Co Inc. - ----------------------------------------------------------------------------------------------------------------------- Andrew Jergens Co. Hero Nutritional Products Playtex - ----------------------------------------------------------------------------------------------------------------------- Andy's Salsa Hershey Chocolate USA Plbsports - ----------------------------------------------------------------------------------------------------------------------- Annie's Naturals Hetty Fair Pliant Solutions Corp. - ----------------------------------------------------------------------------------------------------------------------- Ansell Healthcare Products Inc. Hickory Farms Plochman Inc. - ----------------------------------------------------------------------------------------------------------------------- Ansellpersonalp Hilco Poblano Hot Sausage - ----------------------------------------------------------------------------------------------------------------------- Anthony Thomas Candy Company Hill's Pet Nutrition Polarindustries - ----------------------------------------------------------------------------------------------------------------------- Apothecary Products Inc. Hillshirefarms Polaroid Corporation - ----------------------------------------------------------------------------------------------------------------------- Apple & Eve, LLC Hilltop Dairy Inc. Pompeian Inc. - ----------------------------------------------------------------------------------------------------------------------- Applica Consumer Products Inc. Himmel Hair Care Pooley Inc. - ----------------------------------------------------------------------------------------------------------------------- Aquastar Himmel Nutrition Inc. Popcorn Board - ----------------------------------------------------------------------------------------------------------------------- Archabald Candy Hines Horticulture Inc. Poppee's Popcorn - ----------------------------------------------------------------------------------------------------------------------- Archway Hit Entertainment Portable Products Inc. - ----------------------------------------------------------------------------------------------------------------------- Archway Cookies, LLC HMS Mfg. Co. Portion Pac Inc. - ----------------------------------------------------------------------------------------------------------------------- Armkell, LLC Hoffman Poultry Inc. Potlatch Corp. - ----------------------------------------------------------------------------------------------------------------------- Armour Swift Eckrich Hofmann Sausage Co. Inc. Potter Inc. - ----------------------------------------------------------------------------------------------------------------------- Arrow Plastic Mfg. Hogilpharmaceut Powell - ----------------------------------------------------------------------------------------------------------------------- Arthritis Research Holiday Housewares Inc. Powerbarincorpo - ----------------------------------------------------------------------------------------------------------------------- Arthur R Gren Beer Holland American Wafer Prairie Farms - ----------------------------------------------------------------------------------------------------------------------- Asap Food Products Holmesair Preferred Brands - ----------------------------------------------------------------------------------------------------------------------- Asiana Cuisine Enterprise Inc. Holmesproducts Premierbeverage - ----------------------------------------------------------------------------------------------------------------------- Associated Milk Producers Holyfamilychurch Premio Foods - ----------------------------------------------------------------------------------------------------------------------- Associatedhygenicdrypers Home Products International Premium Beverage NA - ----------------------------------------------------------------------------------------------------------------------- AT&T Solutions Home Styles Prestige Brands International - ----------------------------------------------------------------------------------------------------------------------- Ateeco Inc. Homedics Prestigeglobal - ----------------------------------------------------------------------------------------------------------------------- Athens Pastry & Frozen Fds Inc. Homemade Brand Foods Inc. Primedia - ----------------------------------------------------------------------------------------------------------------------- Atkins Nutritional Homestat Farm Princess International - ----------------------------------------------------------------------------------------------------------------------- Atlantis Homz Procter & Gamble - ----------------------------------------------------------------------------------------------------------------------- Audio Video Rack Services Honeydewcanada Procter & Gamble Distributing - ----------------------------------------------------------------------------------------------------------------------- Aunt Della's Cookie Corp. Honeymoon Paper Products Proctorsilex - ----------------------------------------------------------------------------------------------------------------------- Aunt Molly's Popcorn Co. Hoover Productos Alimentioios La Mod. - ----------------------------------------------------------------------------------------------------------------------- Aurora Foods Inc. Hormel Financial Services Profoot Foot Care Products - ----------------------------------------------------------------------------------------------------------------------- Authentic Specialty Foods Hot Mama Foods Inc. Programmed Products Corp. - ----------------------------------------------------------------------------------------------------------------------- Avalon Beverage Co. House Foods America Corp. Progress Supply Inc. - ----------------------------------------------------------------------------------------------------------------------- Avery Dennison Office Prod Inc. Howard Foods, Inc. Progressive Inc. - ----------------------------------------------------------------------------------------------------------------------- Axis Import Export Corp. HP Hood Inc. Promo Works - ----------------------------------------------------------------------------------------------------------------------- B & B Supplies HPF LLC Promotion In Motion - ----------------------------------------------------------------------------------------------------------------------- B & G Foods Incorporated HSM Of America LLC Promotions Unlimited Corp. - ----------------------------------------------------------------------------------------------------------------------- B. E. Wright Distributing, Corp. Huffman Hosiery Psccreditunion - ----------------------------------------------------------------------------------------------------------------------- B.F. Ascher & Company Inc. Huhtamaki Food Service, Inc. PTS Labs - ----------------------------------------------------------------------------------------------------------------------- Bagels Forever Inc. Huish Detergents Inc. Pulse Nutrition Solutions Inc. - ----------------------------------------------------------------------------------------------------------------------- Bake Shop Bread Hunter Pumpkin Masters - ----------------------------------------------------------------------------------------------------------------------- Bakemark Huntwesson Purdue - ----------------------------------------------------------------------------------------------------------------------- Bakersdozen Hussmann Corp-Chicago Pure Lip Inc. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Baldwin Richardson Foods Corp. Icco-Cheese Co Inc. Purely Supreme Foods - ----------------------------------------------------------------------------------------------------------------------- Ball Alltrista Icicle Seafood Pw Vinters/Lindeman - ----------------------------------------------------------------------------------------------------------------------- Ballard Farm Sausage Idaho Fresh Pak Quaker Foods & Beverages - ----------------------------------------------------------------------------------------------------------------------- Barber Foods Idelle Labs - Ltd. Qualex Inc. - ----------------------------------------------------------------------------------------------------------------------- Barilla America Inc. IDMG Quality Baking - ----------------------------------------------------------------------------------------------------------------------- Baron Corp Idmg Quality Farms Inc. - ----------------------------------------------------------------------------------------------------------------------- Bar-S Foods Co. Imperialtoy Qualityking - ----------------------------------------------------------------------------------------------------------------------- Bartyzel Food Supply Inc. Implus Corp. Quickie Mfg Corp. - ----------------------------------------------------------------------------------------------------------------------- Batavia Wine Cella Implus Footcare LLC Quickie Mops And Brooms - ----------------------------------------------------------------------------------------------------------------------- Baumer Foods Inc. Indiana Glass Quigley - ----------------------------------------------------------------------------------------------------------------------- Bausch + Lomb Initial Brands Inc. Quigley Corp. - ----------------------------------------------------------------------------------------------------------------------- Baxter Healthcare Inline Plastics Corp. R J Reynolds Tobacco Co. - ----------------------------------------------------------------------------------------------------------------------- Bayer Corporation - Healthcare Inliten LLC R.L. Zeigler Company, Inc. - ----------------------------------------------------------------------------------------------------------------------- BCM Sales Innovamarketing Rainbow Linens - ----------------------------------------------------------------------------------------------------------------------- Beaumont Products, Inc. Innovative Promotions Ralda Investments, LLC - ----------------------------------------------------------------------------------------------------------------------- Bectondickinson Innovative Publishing Ralston Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Beech Nut Nutrition Corp. Insigniasystems Ramseypopcorn - ----------------------------------------------------------------------------------------------------------------------- Beef Coupon Integrated Brands Inc. Randall Food Products Inc. - ----------------------------------------------------------------------------------------------------------------------- Beef International Inc. Inter - American Foods, Inc. Random House - ----------------------------------------------------------------------------------------------------------------------- Beiersdorf Inc. Inter Pacific Corp. Rangekleen - ----------------------------------------------------------------------------------------------------------------------- Bel/Kaukauna USA Inter-American Foods, Inc. Ray O Vac Corporation - ----------------------------------------------------------------------------------------------------------------------- Belgo Quebec Inc. Intercraft Ind Corp. Rayovac - ----------------------------------------------------------------------------------------------------------------------- Bell Carter Foods Inc. Interdesign Inc. Ray's New York Bagels - ----------------------------------------------------------------------------------------------------------------------- Benjaminmedwin International Baking Readi-Bake - ----------------------------------------------------------------------------------------------------------------------- Benjerrysicecre International Multifoods Reames Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Bennett Mineral Company International Silver Co. Reckitt Benckiser - ----------------------------------------------------------------------------------------------------------------------- Benzel's Bakery Inc. Internationalmu Red Gold Inc. - ----------------------------------------------------------------------------------------------------------------------- Benzels Food Distributor - DSD Interstate Brands Cake # 58 Redco - ----------------------------------------------------------------------------------------------------------------------- Beringer Wine Estates Interstate Brands Corp. Redox Brands Inc. - ----------------------------------------------------------------------------------------------------------------------- Berks Packing Co. Interstate Promotions, Inc. Redtagbiz, Inc. - ----------------------------------------------------------------------------------------------------------------------- Berner Foods Inc. Inverness Medical Inc. Reily Foods Company - ----------------------------------------------------------------------------------------------------------------------- Bertolliusa Ironstone Vineyards Reilyfoods - ----------------------------------------------------------------------------------------------------------------------- Best Brands Corp. Irving Tissue Inc. Reiter Dairy - ----------------------------------------------------------------------------------------------------------------------- Bestsweet Inc. Italianvillagep Rembrandt Corp. - ----------------------------------------------------------------------------------------------------------------------- Beverage Specialties Italpasta Limited Republic Tobacco - ----------------------------------------------------------------------------------------------------------------------- Bic Corporation Ivexpackagingto Revlon Inc. - ----------------------------------------------------------------------------------------------------------------------- Bickel's Snack Foods, Inc. J & B Group Rex Imports - ----------------------------------------------------------------------------------------------------------------------- Big Red J. M. Smucker Co Llc Rexall Sundown, Inc. - ----------------------------------------------------------------------------------------------------------------------- Bijiou International Corp. J.V. General Cleaning Service Reynolds Metals Co. - ----------------------------------------------------------------------------------------------------------------------- Bilinski Sausage J+J Snack Foods Corp. Rhodes International - ----------------------------------------------------------------------------------------------------------------------- Bil-Jac Jack Guttman, Inc. Ribs King Inc. - ----------------------------------------------------------------------------------------------------------------------- Binney & Smith Inc. Jack Of All Games Rich Products Corp. - ----------------------------------------------------------------------------------------------------------------------- Biocosmetic Research Jacklinkssnacks Richardsonbrand - ----------------------------------------------------------------------------------------------------------------------- Bio-Logic Aqua Tec James Austin Company Richs - ----------------------------------------------------------------------------------------------------------------------- Birds Eye Foods, Inc. James P Linette Inc. Rich-Seapak Corp. - ----------------------------------------------------------------------------------------------------------------------- Bison Foods Co. Jans Inc. Ricola USA Inc. - ----------------------------------------------------------------------------------------------------------------------- Bleyer Industries Jaretinternatio Riponfoods - ----------------------------------------------------------------------------------------------------------------------- Blistex Inc. Ja-Ru, Inc. Risers Corporation - ----------------------------------------------------------------------------------------------------------------------- Blockdrug Jason Natural Cosmetics Ritchey Produce - ----------------------------------------------------------------------------------------------------------------------- Blue Diamond Growers Jasper Products, Llc Rite Aid Chromatics - ----------------------------------------------------------------------------------------------------------------------- Blue Sky Marketing Inc. Jasper Wyman & Son Rite Aid Corporation - ----------------------------------------------------------------------------------------------------------------------- Bluediamond Jay Sea Beer Co Ritefoods - ----------------------------------------------------------------------------------------------------------------------- BMK, Inc. Jbwilliams Ritviktoy - ----------------------------------------------------------------------------------------------------------------------- Bobs Lawn Care & Landscaping Jelmar Rivasports - ----------------------------------------------------------------------------------------------------------------------- Bob's Red Mill Food Jelsert Company River Valley Foods - ----------------------------------------------------------------------------------------------------------------------- Body Care Group, Inc. Jim Belzak Riviana Foods - ----------------------------------------------------------------------------------------------------------------------- Bongraincheeseu Jmc Impact, Inc. RM Palmer Co. - ----------------------------------------------------------------------------------------------------------------------- Bonne Bell Inc. Joe Meat Roaring Spring Bottling Co. - ----------------------------------------------------------------------------------------------------------------------- Boot's Healthcare Johanna Foods Inc. Rob Salamida Co. - ----------------------------------------------------------------------------------------------------------------------- Borden Foods Inc. John B Sanfilippo And Son Inc. Robert Mondavi - -----------------------------------------------------------------------------------------------------------------------
3
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Bornell Supply Company John Becker Robert Or Diane Tedd - ----------------------------------------------------------------------------------------------------------------------- Bosco John Frieda Hair Care Rocco J Testani Inc. - ----------------------------------------------------------------------------------------------------------------------- Boyd Flotation John G. Ryan Inc. - Beer Dist. Rodlen Labs - ----------------------------------------------------------------------------------------------------------------------- Boyer Candy Company Inc. John Middleton Inc. Roger Helmick - ----------------------------------------------------------------------------------------------------------------------- Brach & Brock John Zidian Brokerage Company Rolling Hills Candle Company - ----------------------------------------------------------------------------------------------------------------------- Brady Enterprises John Zidian Co., Inc. Rosemount Estate Winery - ----------------------------------------------------------------------------------------------------------------------- Brakebush Brothers Johnnie Ryan Co. Inc. Rosina Food Products - ----------------------------------------------------------------------------------------------------------------------- Braunince Johnson & Johnson Sales & Logistic Ross Products Division - ----------------------------------------------------------------------------------------------------------------------- Breath Asure Inc. Johnson Diversey Roth Kase Ltd USA - ----------------------------------------------------------------------------------------------------------------------- Bremner Inc. Johnsonville Foods Co. Inc. Rotolo Foods LLC - ----------------------------------------------------------------------------------------------------------------------- Bristol-Myers Products Company Johnstone Supply Round Hill Vinyards - ----------------------------------------------------------------------------------------------------------------------- Brite Star Manufacturing Co. Johnthomasfurni Royal Appliance Mfg. Co. - ----------------------------------------------------------------------------------------------------------------------- Brookfield Farms Jolen Inc. Royal Consumer Info. Products - ----------------------------------------------------------------------------------------------------------------------- Broughton Foods Co. Jonel A Div Of Am Cosmetics Royal Lace - ----------------------------------------------------------------------------------------------------------------------- Brown & Williamson Tobacco Co. Jones Dairy Farm Royal Oak Sales Inc. - ----------------------------------------------------------------------------------------------------------------------- Brown Paper Goods Company Jose Madrid Royce Union Bicycle Co. - ----------------------------------------------------------------------------------------------------------------------- Bruce Foods Corporation Joy Cone Co. Rubbermaidhomep - ----------------------------------------------------------------------------------------------------------------------- Buckeye Distributing JP Products L.C. Run-A-Ton Group Inc. - ----------------------------------------------------------------------------------------------------------------------- Budd Foodsinc. Judith Gilmore Russell Stover Candies - ----------------------------------------------------------------------------------------------------------------------- Buena Vista Home Video Juniata Packing Co. Russellstoverca - ----------------------------------------------------------------------------------------------------------------------- Buffalo Beverage Corp. Just Knits, Inc. Russer Foods - ----------------------------------------------------------------------------------------------------------------------- Bumble Bee Seafoods, Inc. Justborn Russer Foods Co - ----------------------------------------------------------------------------------------------------------------------- Bunzl Distribution Northeast Kal Kan Foods Inc. Rutland Herald - ----------------------------------------------------------------------------------------------------------------------- Burlington Basket Company Kal Kreations Ryco - ----------------------------------------------------------------------------------------------------------------------- Burns Int'l Security Services Kash N Gold Ltd. S & B International - ----------------------------------------------------------------------------------------------------------------------- Bush Brothers & Co. Kashi Company S & G - ----------------------------------------------------------------------------------------------------------------------- Bushindustries Kayem Foods Incorporated S C Johnson & Son Inc. - ----------------------------------------------------------------------------------------------------------------------- C & S Wholesale Grocers Inc. Kayser Roth Corp. S.T. Specialty Foods, Inc. - ----------------------------------------------------------------------------------------------------------------------- C&S Delivery Inc. Kaz Inc. Safeway Corporate Brands - ----------------------------------------------------------------------------------------------------------------------- C. B.Fleet Company Inc. Keebler Company Saffire Gasuik Saffire - ----------------------------------------------------------------------------------------------------------------------- C. F. Burger Creamery Kellogg Sales Co. Sahlen Packing Co. Inc. - ----------------------------------------------------------------------------------------------------------------------- Cabot Creamery Cooperative Kemps Foods LLC Sakol - ----------------------------------------------------------------------------------------------------------------------- Cabrada Nutrition Ken's Foods Inc. Salamanca Beverage Co. - ----------------------------------------------------------------------------------------------------------------------- Cadbury Schweppes Amer. Bev. Keystonepretzel Salerno Delicious Brands - ----------------------------------------------------------------------------------------------------------------------- Cafe Bustelo KGM Industry Salov N/A Filippo Berio - ----------------------------------------------------------------------------------------------------------------------- Cains Kikkoman Intern Inc. Salton - ----------------------------------------------------------------------------------------------------------------------- Cains Pickles Kimberly-Clark Corp. San J International - ----------------------------------------------------------------------------------------------------------------------- Calgon King Arthur Sanchristerlis Distr. - ----------------------------------------------------------------------------------------------------------------------- Calgon Corbon Corp. King's Hawaiian Bakery West Inc. Sandridge Food Corporation - ----------------------------------------------------------------------------------------------------------------------- California Dried Plum Kirin Irc - '99 Sandusky Distributing Company - ----------------------------------------------------------------------------------------------------------------------- California Milk Advisory Knauss Dried Beef Company Sanfilippo - ----------------------------------------------------------------------------------------------------------------------- Camellia Gen Provision Co. Knouse Foods Sanford LP - ----------------------------------------------------------------------------------------------------------------------- Camillus Business Forms Inc. Kobayashi Santa's Best - ----------------------------------------------------------------------------------------------------------------------- Camino Real Foods Kobayaski Healthcare Sanzone Dist Co Inc. - ----------------------------------------------------------------------------------------------------------------------- Campbell Sales Company Kozy Shack Enterprises, Inc. Saputo - ----------------------------------------------------------------------------------------------------------------------- Canbra Foods Ltd. Kraft General Foods Saputo Cheese USA - ----------------------------------------------------------------------------------------------------------------------- Canbrands Coupon Krema Group Limited Sara Lee Coffee & Tea - ----------------------------------------------------------------------------------------------------------------------- Candle-Lite Krispy Kreme Doughnut Corp. Sara Lee Frozen Division - ----------------------------------------------------------------------------------------------------------------------- Cappione A Inc. Kroger Sara Lee Household & Body Care - ----------------------------------------------------------------------------------------------------------------------- Caravan Products Co. Inc. Kunzler And Company Inc. Sara Lee Us Foods - ----------------------------------------------------------------------------------------------------------------------- Carbolite L & M Inc / Chefs Sargento Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Cargill L & N Sales And Marketing Inc. SAS Group - ----------------------------------------------------------------------------------------------------------------------- Cargill Inc - Poultry Division L&P Financial Services Sassy Inc. - ----------------------------------------------------------------------------------------------------------------------- Cargill Inc- Salt Division L. Powell Company Sau Sea Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Carl Estshman Co., Inc. La Rosa Sauza Coupon Offer - ----------------------------------------------------------------------------------------------------------------------- Carlton Cards Ladies Home Journal Sc Johnson & Son Inc. - ----------------------------------------------------------------------------------------------------------------------- Carolinacpnclea Lake Beverage Corp. Schering Plough Healthcare Inc. - ----------------------------------------------------------------------------------------------------------------------- Carolinacpnclearing Lakeport Distributors Schmidproducts - ----------------------------------------------------------------------------------------------------------------------- Carriage House Lakeview Farms Inc. Schneider's Dairy Inc. - ----------------------------------------------------------------------------------------------------------------------- Carter-Wallace Inc. Lamagna Cheese Company Inc. Schoenberg Salt & Chemical - -----------------------------------------------------------------------------------------------------------------------
4
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Carthage Corp. Lamaur Schulze And Burch Biscuit - ----------------------------------------------------------------------------------------------------------------------- Casa Visco Lancaster Eagle Gazette Schwan's Consumer Brands NA, Inc. - ----------------------------------------------------------------------------------------------------------------------- Castle Brands Inc. Land O Lakes Inc. Schwansconsumerbrands - ----------------------------------------------------------------------------------------------------------------------- Castleberry's Food Company Land O'Frost Schwarzkopf & Dep Corporation - ----------------------------------------------------------------------------------------------------------------------- Casual Gourment Lander Schweigert Foods - ----------------------------------------------------------------------------------------------------------------------- Cavallaro Specialty Foods Lane Limited Sci Tech Labs Inc. - ----------------------------------------------------------------------------------------------------------------------- Cbrichardellis Langer Juice Co. Scotts Company - ----------------------------------------------------------------------------------------------------------------------- CCA Industries Langer Juice Co. Scottsliquidgol - ----------------------------------------------------------------------------------------------------------------------- CCDA Waters, LLC Langley Products Seafood Enterprises Inc. - ----------------------------------------------------------------------------------------------------------------------- Cecchetti Sebastiani Cellars Lasonic Season Products Corp. - ----------------------------------------------------------------------------------------------------------------------- Cecil Saydah Corp. Laubscher Cheese Co Inc. Seasonal Designs - ----------------------------------------------------------------------------------------------------------------------- Cedecandy Laura's Lean Beef Company Seatle Coffee Company - ----------------------------------------------------------------------------------------------------------------------- Celentanobros Lavita Seneca Beverage Corp. - ----------------------------------------------------------------------------------------------------------------------- Celltech Pharmaceuticals, Inc. Lea + Perrins Inc. Seneca Foods Corp. - ----------------------------------------------------------------------------------------------------------------------- Cellular World Leaperrins Serac LLC - ----------------------------------------------------------------------------------------------------------------------- Centis Lectec Corporation Sergeants Pet Products - ----------------------------------------------------------------------------------------------------------------------- Central Beverage Ledbetter Packing Co. Servaas Laboratories - ----------------------------------------------------------------------------------------------------------------------- Century Furniture Ind. Co., Ltd. Ledysan USA Inc. Seven-Up Canada Dry - ----------------------------------------------------------------------------------------------------------------------- Certo Bros Dist Co. Lee Pharmaceuticals Seven-Up Company-Berwick - ----------------------------------------------------------------------------------------------------------------------- Ch Robinson Leepharmaceutic Shamrock Foods Co.-Dairy Div - ----------------------------------------------------------------------------------------------------------------------- Chain Reaction Lee-Thompson-Fawcett Sheaffer Pen - ----------------------------------------------------------------------------------------------------------------------- Champion Sales & Marketing Leggs Products Sheridan Distributing - ----------------------------------------------------------------------------------------------------------------------- Changing Paradigm Lego Sherwin-Williams - ----------------------------------------------------------------------------------------------------------------------- Char-Broil Leiner Health Products Sherwood Brands, Inc. - ----------------------------------------------------------------------------------------------------------------------- Charles Leonard, Inc. Leland Jewell Sherwood Food Distributors - ----------------------------------------------------------------------------------------------------------------------- Chattem Inc. Lenatureswater Shoppers Hotline - ----------------------------------------------------------------------------------------------------------------------- Chef Solutions Inc. Lew-Mark Baking Co. Siege Chemical Company - ----------------------------------------------------------------------------------------------------------------------- Chefamerica LGS Signature Brands LLC - ----------------------------------------------------------------------------------------------------------------------- Chelsea Milling Co. Libbey Glass Inc. Signature Fruit - ----------------------------------------------------------------------------------------------------------------------- Chempro Liberty Gold Fruit Co Inc. Significant Snack LLC - ----------------------------------------------------------------------------------------------------------------------- Chenangovalleyp Liberty Richter Incorporated Silhouette Brands - ----------------------------------------------------------------------------------------------------------------------- Cherryland Beverages, Inc. Licentia Silver Goose Accessories - ----------------------------------------------------------------------------------------------------------------------- Chesebroughpond Liddell Silver Palate Kitchen's - ----------------------------------------------------------------------------------------------------------------------- Chiavetta's Catering Lidestri Foods, Inc. Similason Corp. - ----------------------------------------------------------------------------------------------------------------------- Chiquita Processed Foods, Llc Lifescan Inc. Simmons Foods - ----------------------------------------------------------------------------------------------------------------------- Chiquitabrands Lifestream Technologies Simplylitefoods - ----------------------------------------------------------------------------------------------------------------------- Christie Food Products, Inc. Lifetime Hoan Products Sioux Honey Association - ----------------------------------------------------------------------------------------------------------------------- Chung's Gourmet Foods Lifeworks LLC Slim Fast Foods Company - ----------------------------------------------------------------------------------------------------------------------- Chupa Chups USA Lifoam Nanuf Smithfield Packing Co. Inc. - ----------------------------------------------------------------------------------------------------------------------- Church And Dwight Co. Inc. Lift Truck Motors Inc. Smithkleinbeech - ----------------------------------------------------------------------------------------------------------------------- Churchdwight Liggett Vector Brands Inc. Snapple Dist., Inc. - ----------------------------------------------------------------------------------------------------------------------- Cibavision Lightning Bug Snapplebeverage - ----------------------------------------------------------------------------------------------------------------------- Citgo Petroleum Corp. Lil Drug Store Snow Ball Foods, Llc - ----------------------------------------------------------------------------------------------------------------------- Clabbergirlbaki Lime-O-Sol Company So - Be Refreshments - ----------------------------------------------------------------------------------------------------------------------- Clairol Lincoln Snacks Company Sokol - ----------------------------------------------------------------------------------------------------------------------- Class Act Delivery Inc. Lindsey Foods Ltd. Solo Cup Co. - ----------------------------------------------------------------------------------------------------------------------- Clearlycanadian Linette Quality Chocolates Some Kind Of Wonderful Food Co. - ----------------------------------------------------------------------------------------------------------------------- Clorox Co. Linonshomedecor Sony - ----------------------------------------------------------------------------------------------------------------------- Cm Products, Inc. Linsey Foods Ltd. Sony Corporation Of America - ----------------------------------------------------------------------------------------------------------------------- Coca Cola Bottling Co Consol Litehouse Dressing Sophiemaeedi - ----------------------------------------------------------------------------------------------------------------------- Coca Cola Btl Of Ne Little Crow Foods Sorrento Lactalis Company - ----------------------------------------------------------------------------------------------------------------------- Coca-Cola Bottling Co-Egl Lobster Trap Company Southern Container Corp. - ----------------------------------------------------------------------------------------------------------------------- Colavita USA Locin Industrie Limited Southern Fresh Foods - ----------------------------------------------------------------------------------------------------------------------- Cold Hollow Cider Mill Lofthouse Foods Southern Sales & Market Group - ----------------------------------------------------------------------------------------------------------------------- Coleman Company Inc. Longos Bakery Southern Tier News Co. - ----------------------------------------------------------------------------------------------------------------------- Colgate Palmolive Co. Loreal Hair Care Div. Southern Tropicals Inc. - ----------------------------------------------------------------------------------------------------------------------- Colgatetoiletri Lorillard Southernseafood - ----------------------------------------------------------------------------------------------------------------------- Colgin Incorporated Lorillardtobacc Specialty Brands Inc. - ----------------------------------------------------------------------------------------------------------------------- Collarini's Pasta Products Louis Maull Co. Specialty Brands Of America - ----------------------------------------------------------------------------------------------------------------------- Collegeville Imagineering Louis Trauth Dairy Specialty Foods Group, Inc. - -----------------------------------------------------------------------------------------------------------------------
5
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Columbia Empire Farms Louisana Purchase Spectrum - ----------------------------------------------------------------------------------------------------------------------- Combe Inc. Lozier Corporation Spectrum Brands - ----------------------------------------------------------------------------------------------------------------------- Comfort Bay Foods Lucy Foods Spic And Span Company - ----------------------------------------------------------------------------------------------------------------------- Comfort Foods Inc. Luden Spice Market Inc. - ----------------------------------------------------------------------------------------------------------------------- Commerce Corporation Luiginos Inc. Sportpharma - ----------------------------------------------------------------------------------------------------------------------- Commonwealth Brands Inc. Lulu's Dessert Starkistfoods - ----------------------------------------------------------------------------------------------------------------------- Commonwealthofp Lumisource Stateofohio - ----------------------------------------------------------------------------------------------------------------------- Conagra Lundberg Family Farms Steak-Umm Company, Inc. - ----------------------------------------------------------------------------------------------------------------------- Conagra Dairy Foods Company LW Randles Stella Pharmacuetical - ----------------------------------------------------------------------------------------------------------------------- Conagra Flour Milling M & M Mars Sterilite Corp. - ----------------------------------------------------------------------------------------------------------------------- Conagra Foods Refrigerated Food M & M Watch Co. Sterling - ----------------------------------------------------------------------------------------------------------------------- Conagra Frozen Foods M. A. Gedney Company Sterling USA - ----------------------------------------------------------------------------------------------------------------------- Conagra Snack Foods Group Maab Sterling Vineyards - ----------------------------------------------------------------------------------------------------------------------- Conagrapets Macadamia Nut Stock Yards Meat Packing Co. - ----------------------------------------------------------------------------------------------------------------------- Conair Corp. Mack Blevins Enterprises LLC Stonehedge Farms - ----------------------------------------------------------------------------------------------------------------------- Connors Brunswick, Inc. Mackblevinsent Storck USA-LP - ----------------------------------------------------------------------------------------------------------------------- Conros Corporation Magla Products Strahler's Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Consumer Guild Foods Inc. Magnetic Springs Water Co. Straight Arrow - ----------------------------------------------------------------------------------------------------------------------- Contac Lens Supply Malco Products Inc. Stravina - ----------------------------------------------------------------------------------------------------------------------- Contessa Party Platter Mali's All Natural Stretch Island Fruit Inc. - ----------------------------------------------------------------------------------------------------------------------- Continental Commercial Product Malt-O-Meal Co. Strickler Ice - ----------------------------------------------------------------------------------------------------------------------- Continental Fragrances, Ltd. Mama Rosies Stroehmann Bakeries - ----------------------------------------------------------------------------------------------------------------------- Convenience Kits Intl. Manischewitz Strom Products Ltd. - ----------------------------------------------------------------------------------------------------------------------- Conwood Sales Company, L.P. Mann Packing Co Inc. Sugardale Foodfresh Mark Inc. - ----------------------------------------------------------------------------------------------------------------------- Coors Brewing Company Maple Grove Floral Wholesale Sun & Earth Inc. - ----------------------------------------------------------------------------------------------------------------------- Corning Consumer Product Maple Leaf Bakery Inc. Sun Look, Inc. - ----------------------------------------------------------------------------------------------------------------------- Cosco Maple Leaf Farms, Inc. Sunbeam Corporation - ----------------------------------------------------------------------------------------------------------------------- Cosmetic Promotion Maplehurst Sunflowergroup - ----------------------------------------------------------------------------------------------------------------------- Cosrich, A Division Of PMC, Inc. Marbo Inc. Sunmaid Growers Of California - ----------------------------------------------------------------------------------------------------------------------- Cott Beverages Wyomissing Inc. Marcal Paper Mills Inc. Sunpacificenter - ----------------------------------------------------------------------------------------------------------------------- Coty Margaritaville Food Prod. Sunshinemills - ----------------------------------------------------------------------------------------------------------------------- Coty Us LLC Marie Callender's Sunsplash - ----------------------------------------------------------------------------------------------------------------------- Country Gourmet Food Maries Quality Foods Sunstar Butler - ----------------------------------------------------------------------------------------------------------------------- Creative Bath Products Marilyn Henry Or Selim Serry Sunsweet Grower - ----------------------------------------------------------------------------------------------------------------------- Creative Laboratories Martek Biosciences Superiors Brand Meats - ----------------------------------------------------------------------------------------------------------------------- Creative Marketing Martinelli's Sparkling Supermarketing Promotions - ----------------------------------------------------------------------------------------------------------------------- Crossmark Maruchan Inc. Super-Max Corporation - ----------------------------------------------------------------------------------------------------------------------- Crowley Foods Inc. Marzettit Supervalu Holdings, Inc. - ----------------------------------------------------------------------------------------------------------------------- Crystalclear MAS Sure Fit Incorporated - ----------------------------------------------------------------------------------------------------------------------- CSC Brands LP Mas & Fils Jardiniers Ltee Sure Trim Labs - ----------------------------------------------------------------------------------------------------------------------- Cuddletown Mashallanproduc Suretrack Melt Inc. - ----------------------------------------------------------------------------------------------------------------------- Cuisine De France Inc. Massconnections Surgical Appliance Industries - ----------------------------------------------------------------------------------------------------------------------- Culinary Standards, Inc. Master Wholesale Inc. Susquehanna Candle - ----------------------------------------------------------------------------------------------------------------------- Cumberland Pkg Corp. Mastercard International Sweetsuekitchen - ----------------------------------------------------------------------------------------------------------------------- Custom Quest Matlaw's Food Products Swisher International Inc. - ----------------------------------------------------------------------------------------------------------------------- Cycle Group, Inc. Mauna Loa Macadamia Nut Sylvania - ----------------------------------------------------------------------------------------------------------------------- D H Associates Maxell Corporation Of America Syroco Fiskars - ----------------------------------------------------------------------------------------------------------------------- D.L. Peterson Trust Maybelline Sysco Food Services-Syracuse - ----------------------------------------------------------------------------------------------------------------------- Dads Maybellinesales T Marzetti Company - ----------------------------------------------------------------------------------------------------------------------- Daewoo Electronics Corp Of Am. Mayer Bros. Tab Consulting - ----------------------------------------------------------------------------------------------------------------------- Dairy Fresh Foods Mayfair Sales Inc. Table Tops Unlimited - ----------------------------------------------------------------------------------------------------------------------- Daisy Brand Inc. Mc Cain Foods Inc. Tabletops - ----------------------------------------------------------------------------------------------------------------------- Dakota Pork Industries Mccadam Cheese Taro Pharmaceuticals - ----------------------------------------------------------------------------------------------------------------------- Dan Carter Inc. Mccall Farms Inc. Taylor Packing Co. Inc. - ----------------------------------------------------------------------------------------------------------------------- Dan River Inc. McCormick US Consumer Products Technibilt Tm Ltd Inc. - ----------------------------------------------------------------------------------------------------------------------- Dannon Co Inc. Mcculloch Motors Inc. Telecomproducti - ----------------------------------------------------------------------------------------------------------------------- Danone Waters Of N. America Mcilhenny Co. Teledex Inc. - ----------------------------------------------------------------------------------------------------------------------- Daymon Associates Mckee Baking Co. Temparin Offer - ----------------------------------------------------------------------------------------------------------------------- Dayton Health Mckeon Products Tennessee Pride - ----------------------------------------------------------------------------------------------------------------------- Dean Foods Co. Mcnamara Dairy Terry King - -----------------------------------------------------------------------------------------------------------------------
6
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Dean Specialty Mcneil Consumer Products Tetley USA, Inc. - ----------------------------------------------------------------------------------------------------------------------- Del Grosso Food Inc. Mcneil Specialty Products Tewnutritional - ----------------------------------------------------------------------------------------------------------------------- Del Laboratories Inc. Mds Foods Texas Instruments Inc. - ----------------------------------------------------------------------------------------------------------------------- Del Monte Foods Mead Johnson Nutritional T-Fal Corporation - ----------------------------------------------------------------------------------------------------------------------- Del Pharmaceuticals Mead Westvaco Thai Kitchen/Epicurean - ----------------------------------------------------------------------------------------------------------------------- Delallo Inc. Meco The Becoming Co. - ----------------------------------------------------------------------------------------------------------------------- Delallo's Media Recovery, Inc. The Brulin Corporation - ----------------------------------------------------------------------------------------------------------------------- Delimex Media Syndication The Depository Trust Company - ----------------------------------------------------------------------------------------------------------------------- Delta Carbona LP Medtech Products, Inc. The Evercare Company - ----------------------------------------------------------------------------------------------------------------------- Delval Equipment Corporation Melitta USA Inc. The Great Fish Co., Llc - ----------------------------------------------------------------------------------------------------------------------- Dena Corporation Mentholatum Co. The Hain Celestial Group, Inc. - ----------------------------------------------------------------------------------------------------------------------- Dennisonmfg Meow Mix The Herbert Stanley Co., LLC - ----------------------------------------------------------------------------------------------------------------------- Dentek Oral Care, Inc. Merisant The Holmes Group - ----------------------------------------------------------------------------------------------------------------------- Desert Glory Merz Pharmaceuticals The News Group - ----------------------------------------------------------------------------------------------------------------------- Dewar's Distillery Met Rx The Sentinal - ----------------------------------------------------------------------------------------------------------------------- Diageo Metabolife International, Inc. The White Rain Company - ----------------------------------------------------------------------------------------------------------------------- Dial Corporation Method Home Care The Yofarm Company - ----------------------------------------------------------------------------------------------------------------------- Diamond Dist Inc. Metrobeverage Theme Co-Op Promotions - ----------------------------------------------------------------------------------------------------------------------- Diamond Of California Mexamerica Foods Thomasville Furniture Industri - ----------------------------------------------------------------------------------------------------------------------- Dimpflmeier Bakery Ltd. Mexican Accent, Inc. Thornapplevalle - ----------------------------------------------------------------------------------------------------------------------- Dishwasher Magic MFM Industries Three M 3m Pbc1590 (Nc) - ----------------------------------------------------------------------------------------------------------------------- Distributionser Michael Angelo's Threem - ----------------------------------------------------------------------------------------------------------------------- Dix Preventive Products Inc. Michael Foods Inc. Tillamook Dist. Company - ----------------------------------------------------------------------------------------------------------------------- Dixie Crystal Michaelfoods TJ Sheehan Dist. Inc. - ----------------------------------------------------------------------------------------------------------------------- Doanepet Mickel Silvis Tnt Fireworks/American Promo - ----------------------------------------------------------------------------------------------------------------------- Doldo Bros. Midstate Bakery Dist. Inc. Toastmasteredis - ----------------------------------------------------------------------------------------------------------------------- Dole Fresh Fruit Company Midstate Mills Tofutti - ----------------------------------------------------------------------------------------------------------------------- Dole Fresh Vegetables Inc. Midwest Seafood Inc. Tombstone Pizza Corp. - ----------------------------------------------------------------------------------------------------------------------- Dole Packaged Foods Miguels Stowe Away Tones Brothers Inc. - ----------------------------------------------------------------------------------------------------------------------- Dominion Hope Mike-Sells Potato Chip Co. Tony Packo Food Co. - ----------------------------------------------------------------------------------------------------------------------- Don Miguel Mexican Foods Inc. Milkco, Inc. Tootsie Roll Div/Tri Sales Co. - ----------------------------------------------------------------------------------------------------------------------- Double-Cola Co-USA Millbrook Distribution Service Topco Associates Inc. - ----------------------------------------------------------------------------------------------------------------------- Driscoll Strawberry Assoc. Miller Brewing Topps Company Inc. - ----------------------------------------------------------------------------------------------------------------------- Dry Inc. Milnot Traditional Medicinal - ----------------------------------------------------------------------------------------------------------------------- Dsl.Net Inc. Mincolla A V Dist Co. Trans-Ocean Products, Inc. - ----------------------------------------------------------------------------------------------------------------------- Dubois Area Catholic Schools Miner Group Traulsen - ----------------------------------------------------------------------------------------------------------------------- Duraflame Minute Maid Company Travelers Club Luggage - ----------------------------------------------------------------------------------------------------------------------- Durkee Mower Co. Mirro Company Treasure Valley Sales & Martg - ----------------------------------------------------------------------------------------------------------------------- Duro Bag Mfg Co. Miss Meringue Trigg Laboratories, Inc. - ----------------------------------------------------------------------------------------------------------------------- Duropaperbagmfg Missert A J Inc. Trinchero Family Est - ----------------------------------------------------------------------------------------------------------------------- Dutch Kettle Mission Foods Jefferson Trinitypaperpla - ----------------------------------------------------------------------------------------------------------------------- Dutch Maid Bakery Inc. Mitsui Foods Inc. Tri-State Pallet - ----------------------------------------------------------------------------------------------------------------------- Dynamite Disposal Modern Products Tri-Valley Beverage Inc. - ----------------------------------------------------------------------------------------------------------------------- E & J Gallo Trident Seafoods Corp. Tropicana - ----------------------------------------------------------------------------------------------------------------------- E.E. Dickinson Mohawk Home Trudeau - ----------------------------------------------------------------------------------------------------------------------- E.W. Grobbel Sons, Inc. Monroe Bottling Inc. Trudeauincorper - ----------------------------------------------------------------------------------------------------------------------- Eagle Beverage Co. Montana Mills Bread Try It Distributing Co. Inc. - ----------------------------------------------------------------------------------------------------------------------- Eagle Family Foods Inc. Monterey Pasta Company Turkey Hill Dairy Inc. - ----------------------------------------------------------------------------------------------------------------------- Earthgrains Co Ref. Dough Prod. Monticello Drug Company Turtle Mountain, Inc. - ----------------------------------------------------------------------------------------------------------------------- EAS Morningstar Tyler Parts Dist. Center - ----------------------------------------------------------------------------------------------------------------------- East Coast Olive Oil Corp. Morrone Company Tyson Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Eastman Kodak Company Morton Manufacturing&Trade Inc. U.S. Cotton LLC - ----------------------------------------------------------------------------------------------------------------------- Eastmankodak Morton Salt U.S. Foodservice - ----------------------------------------------------------------------------------------------------------------------- Ecce Panis Mottsusa Udv/West - ----------------------------------------------------------------------------------------------------------------------- Econo Chem Mountain States Rosen, Llc UFCW Local 1 - ----------------------------------------------------------------------------------------------------------------------- Economy Locker Storage Co. Inc. Mountaire Farms UFCW Local One - ----------------------------------------------------------------------------------------------------------------------- Edwards Fine Foods, Inc. Mr. Coffee Ultra Distributors - ----------------------------------------------------------------------------------------------------------------------- Edwards Pie Mrs. Cubbison's Foods Uncle Bens Inc. - ----------------------------------------------------------------------------------------------------------------------- Edy's Grand Ice Cream Mt. Olive Pickle Company Inc. Uncle Wally's, Inc. - ----------------------------------------------------------------------------------------------------------------------- Egames Co. Multifoods US Consumer Prod Di Uni Ball Bts LRC - -----------------------------------------------------------------------------------------------------------------------
7
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Eight O'Clock Coffee Murdock Madaus Schwabe Unilever Best Foods - ----------------------------------------------------------------------------------------------------------------------- EJ Gallo Musco Family Olive Co. Unilever/Home & Personal Care - ----------------------------------------------------------------------------------------------------------------------- Ekcohousewares Mw Polar Foods Unipath Diagnostics Co. - ----------------------------------------------------------------------------------------------------------------------- Elm Hill Meats Mystic United Dairy, Inc. - ----------------------------------------------------------------------------------------------------------------------- Elmer's Products Inc. Nabisco Brands-DSD Only United Industrial Workers - ----------------------------------------------------------------------------------------------------------------------- Elwood W Harper Distr. Nabisco Inc. United Pacific Textiles - ----------------------------------------------------------------------------------------------------------------------- Emmett D. Kinney Jr. Nancy's Pies, Inc. Unitedstatespla - ----------------------------------------------------------------------------------------------------------------------- Empire Candle Nancy's Specialty Foods Universal Group - ----------------------------------------------------------------------------------------------------------------------- Empire Kosher Poultry Inc. Napa Valley Kitchens Universal Products - ----------------------------------------------------------------------------------------------------------------------- Empirestatevent Narita Trading Co. Inc. Universal Studies - ----------------------------------------------------------------------------------------------------------------------- Emruss Nasoya Universal Studios - ----------------------------------------------------------------------------------------------------------------------- Emson National Chicken Council University Blanket & Flag Co. - ----------------------------------------------------------------------------------------------------------------------- Endar National Fruit Products UPS - ----------------------------------------------------------------------------------------------------------------------- Energizer Battery National Pork Board Us Foodservice, Inc. - ----------------------------------------------------------------------------------------------------------------------- Englewood Appliance Co., Inc. National Realty US Mills, Inc. - ----------------------------------------------------------------------------------------------------------------------- Englewoodsales National Tobacco Company L.P. US Playing Cards Company - ----------------------------------------------------------------------------------------------------------------------- Epocal Balla National Turkey Federation US Smokeless Tobacco Brand, Inc. - ----------------------------------------------------------------------------------------------------------------------- ET Browne Drug Co., Inc. Natural Selection Foods USA Detergent Inc. - ----------------------------------------------------------------------------------------------------------------------- Ethnic Gourmet Foods Naturally Potatoes Ustobacco - ----------------------------------------------------------------------------------------------------------------------- Eureka Company Nature's Bounty, Inc. Valenty Bottled Water, Inc. - ----------------------------------------------------------------------------------------------------------------------- Euro Foods Concepts Inc. Natures Cure Valley Fresh Inc. - ----------------------------------------------------------------------------------------------------------------------- Evenfloinc Nature's Earth Products, Inc. Valley National Gases Inc. - ----------------------------------------------------------------------------------------------------------------------- Everson Spice Co., Inc. Nature's Path Foods, Inc. Valleydale Foods - ----------------------------------------------------------------------------------------------------------------------- F & T Distrubution Co. Inc. Naturopathic Labs Vancamp Seafood - ----------------------------------------------------------------------------------------------------------------------- F. Gavina & Sons Navajo Manufacturing Co. Vandekamps - ----------------------------------------------------------------------------------------------------------------------- F. M. Brown's Sons Inc. NDL Products Inc. Vaporeze - ----------------------------------------------------------------------------------------------------------------------- Fairbank Reconstruction Corp. Necco Vector Tobacco - ----------------------------------------------------------------------------------------------------------------------- Fanshot Products LLC Neoteric Cosmetics Inc. Velvet Ice Cream Co. - ----------------------------------------------------------------------------------------------------------------------- Fantasia Nepco Venango Newspapers - ----------------------------------------------------------------------------------------------------------------------- Fantasia Fresh Juice Co. Nestle Venicemaidfoods - ----------------------------------------------------------------------------------------------------------------------- Farmland Foods Inc. Nestle Purina Pet Care Company Ventrepacking - ----------------------------------------------------------------------------------------------------------------------- Farnam Companies Inc. Nestle USA Inc. Verizon Wireless - ----------------------------------------------------------------------------------------------------------------------- Father Sam's Syrian Bread Nestle Waters Canada Vermont Standard Inc. - ----------------------------------------------------------------------------------------------------------------------- Faulding Consumer Co. Nestle Waters North America, Inc. Veryfine Products Inc. - ----------------------------------------------------------------------------------------------------------------------- Faygo Beverages Inc. Neutrogena Corp. Vicen Nutritional - ----------------------------------------------------------------------------------------------------------------------- FBL Redemption New Hampshire Wic Program Victoriavogue - ----------------------------------------------------------------------------------------------------------------------- Fed Ex Trade Networks New World Pasta Victus, Inc. - ----------------------------------------------------------------------------------------------------------------------- Ferolito Vultaggio & Sons New York Frozen Foods Inc. Vidal Sassoon - ----------------------------------------------------------------------------------------------------------------------- Ferrania USA Inc. Newell Company Vieira's Breads Inc. - ----------------------------------------------------------------------------------------------------------------------- Ferrara Pan Candy Co. Inc. Newell-Rubbermaid Inc. Vietti - ----------------------------------------------------------------------------------------------------------------------- Ferrero USA Inc. Newman's Own Inc. Viking Seafoods Inc. - ----------------------------------------------------------------------------------------------------------------------- Fieldcrest Cannon Inc. Nextex Inc. Villa Maria Products - ----------------------------------------------------------------------------------------------------------------------- Finger Lakes Bottling NFI Dietary Supplements Vineyard Brands - ----------------------------------------------------------------------------------------------------------------------- Finger Lakes Dist. Nice-Pak Vintage New World - ----------------------------------------------------------------------------------------------------------------------- Finked65 Nicola VIP International - ----------------------------------------------------------------------------------------------------------------------- First Years Inc. Night Hawk Frozen Fd Virbac Corporation - ----------------------------------------------------------------------------------------------------------------------- Firstalert NK Hurst Vision Specialty Foods - ----------------------------------------------------------------------------------------------------------------------- Flame Trading Company Nk Lawn + Garden Vitasoy Usa Inc. - ----------------------------------------------------------------------------------------------------------------------- Fleischmann's Yeast No Pudge Foods Vitelli Foods LLC - ----------------------------------------------------------------------------------------------------------------------- Flexon Undustries Noble Worldwide Vogue International - ----------------------------------------------------------------------------------------------------------------------- Florida's Natural Growers Nonni's Foods, Inc. W.E. Bassett Co. - ----------------------------------------------------------------------------------------------------------------------- Flowers Coupon Redemption Noonhour Food Products Wahl Clipper Corp. - ----------------------------------------------------------------------------------------------------------------------- Flowers Foods Specialty Group Norbevedi Wallingford Coffee Mills - ----------------------------------------------------------------------------------------------------------------------- Flying Colors Norelcoconsumer Walnut Creek Foods - ----------------------------------------------------------------------------------------------------------------------- Fondagroup Norseman Plastics Walnut Crest - ----------------------------------------------------------------------------------------------------------------------- Food Market Merch Inc. North American Oil Company Warner Lambert Company - ----------------------------------------------------------------------------------------------------------------------- Foreign Candy Company Inc. Northeastern Products Warner Vision - ----------------------------------------------------------------------------------------------------------------------- Fort James Northern Eagle Beverage Wd-40 Company - ----------------------------------------------------------------------------------------------------------------------- Four C Foods Corp. Northland Cranberries, Inc. Weatherworks Inc. - ----------------------------------------------------------------------------------------------------------------------- Four Seasons Sales Nortz Lowville Dist Coinc Weaver Brothers - -----------------------------------------------------------------------------------------------------------------------
8
- ----------------------------------------------------------------------------------------------------------------------- LIST OF PRESERVED CAUSES OF ACTION - ----------------------------------------------------------------------------------------------------------------------- Fox Video Novartis Consumer Health, Inc. Weetabix Company - ----------------------------------------------------------------------------------------------------------------------- Fr Lepage Bakery Novartis Opthalmics Weider Nutrition Group Inc. - ----------------------------------------------------------------------------------------------------------------------- Frangelico Refund Novogen Weil's Food Processing - ----------------------------------------------------------------------------------------------------------------------- Frankford Candy + Choc Co Novus Consumer Awareness Welch Foods Inc. - ----------------------------------------------------------------------------------------------------------------------- Franklin Foods/All Seasons Npb Coupon Wells Dairy Inc. - ----------------------------------------------------------------------------------------------------------------------- Franklin Trade Graphics Ntc Marketing, Inc. Westernpublishi - ----------------------------------------------------------------------------------------------------------------------- Frans Healthy Helpings Ntcmarketing Westim Inc. - ----------------------------------------------------------------------------------------------------------------------- Free Free USA Inc. Nu Products Seasoning Co. Westrick Paper Co. - ----------------------------------------------------------------------------------------------------------------------- Freezer Queen Foods Inc. Nutrition Fitness Weyerhaeuser - ----------------------------------------------------------------------------------------------------------------------- Fresh Gourmet Nutro Products Whink Products Co. - ----------------------------------------------------------------------------------------------------------------------- Fresh Starts Nuvim Inc/Royal Dairy White Cap Inc. - ----------------------------------------------------------------------------------------------------------------------- Fresh Starts Etc Inc. Nve Pharmaceuticals, Inc. White Castle Dist Inc. - ----------------------------------------------------------------------------------------------------------------------- Fried Provision Co. Ny Notion & Craft Supply White Clover Dairy - ----------------------------------------------------------------------------------------------------------------------- Friendly Ice Cream Corp. Nynotions White Wave, Inc. - ----------------------------------------------------------------------------------------------------------------------- Friendship Dairies Oakhurst Dairy Whiting Mfg - ----------------------------------------------------------------------------------------------------------------------- Front End Marketing Specialist Oberto Sausage Company Wiffleball - ----------------------------------------------------------------------------------------------------------------------- Frozen Specialties Inc. Ocean Spray Cranberries Willert Home Products Inc. - ----------------------------------------------------------------------------------------------------------------------- Fruit Of The Loom Odom Tenn Pride Sausage Willowbrook Farms - ----------------------------------------------------------------------------------------------------------------------- Ftd-Florists Transworld Deliv. Odom's Tennessee Pride Wilton Industries Inc. - ----------------------------------------------------------------------------------------------------------------------- Fuji Photo Film USA, Inc. Oetker, Ltd. Wireless Xcessories Group Inc. - ----------------------------------------------------------------------------------------------------------------------- Fujifilmgreeson Ohio Packing Co. Wisconsin Pharmacal - ----------------------------------------------------------------------------------------------------------------------- Funai Corporation Oil-Dri Wise Consumer Products - ----------------------------------------------------------------------------------------------------------------------- Fundex Game Limited Okamoto USA Wise Foods (P&C And Quality) - ----------------------------------------------------------------------------------------------------------------------- Furman Foods Inc. Old London Foods Inc. Wjordancereals - ----------------------------------------------------------------------------------------------------------------------- Future Brands LLC Old Orchard Brands LLC Wm Wrigley Jr. Co. - ----------------------------------------------------------------------------------------------------------------------- G & J Pepsi Cola Bottlers Inc. Old Original Book Binder Wolfe News Service - ----------------------------------------------------------------------------------------------------------------------- G.P.G Olivio Premium Products Inc. Wood Chuck Draft Cider - ----------------------------------------------------------------------------------------------------------------------- Galileo Foods On-Cor Frozen Foods Inc. Woodstock - ----------------------------------------------------------------------------------------------------------------------- Galliker Dairy Company One Way Records, Inc. Woodstock Natural Products Inc. - ----------------------------------------------------------------------------------------------------------------------- Garber Farms Oneida Silversmiths World Finer Foods - ----------------------------------------------------------------------------------------------------------------------- Gardenersdeligh Onondaga Beverage Corp. World Kitchen, Inc. - ----------------------------------------------------------------------------------------------------------------------- Garelick Farms Of New York Ontel Products AKA Wow! Laboratories - ----------------------------------------------------------------------------------------------------------------------- Garnier Oralblaboratori WP Signs - ----------------------------------------------------------------------------------------------------------------------- Gasparini Sales Inc. Orange Glo International Inc. Wrigley Health Care Sales - ----------------------------------------------------------------------------------------------------------------------- General Electric Company Orange Sol Wrigley Sales Company - ----------------------------------------------------------------------------------------------------------------------- General Mills Finance, Inc. Oregon Cherry Growers Wusthot - ----------------------------------------------------------------------------------------------------------------------- Genisoy Oregon Fruit Products Wyeth Consumer Healthcare - ----------------------------------------------------------------------------------------------------------------------- George Bentges Dist. Organic Valley Corporation Wyeth Pharmaceuticals - ----------------------------------------------------------------------------------------------------------------------- George E Delallo Co Inc. Organize It All Xerox Corporation - ----------------------------------------------------------------------------------------------------------------------- George J. Howe Company Orlando Baking Company X-Tra Touch - ----------------------------------------------------------------------------------------------------------------------- George Stambaugh O'Sullivan Industries Inc. Yaw Oil Co Inc. - ----------------------------------------------------------------------------------------------------------------------- Georgia-Pacific Corporation Out International Yorksnacks - ----------------------------------------------------------------------------------------------------------------------- Gerber Products Co. Owasco Beverage Inc. Zachary Confections Inc. - ----------------------------------------------------------------------------------------------------------------------- Gerrit J Verburg Co. Owd Zacky Farms - ----------------------------------------------------------------------------------------------------------------------- GFA Brands Owens Sausage Co. Zak Designs - ----------------------------------------------------------------------------------------------------------------------- Ghirardelli Chocolate P&C Produce EE Zatarains - ----------------------------------------------------------------------------------------------------------------------- Ghirardelli Chocolate P.W. Vinters/Lindman Zicam, LLC - ----------------------------------------------------------------------------------------------------------------------- Gibson Overseas, Inc. P+Cempfederalcreditunion Zick's Specialty Meats - ----------------------------------------------------------------------------------------------------------------------- Gilardifoods Pacific Beverages Zippo Manufacturing Co. - ----------------------------------------------------------------------------------------------------------------------- Gillette Commercial Ops, NA Pacific Wine Products Zone Perfect - ----------------------------------------------------------------------------------------------------------------------- Gilster Mary Lee Corp. Pacificworld Zooth - ----------------------------------------------------------------------------------------------------------------------- Giorgio Foods Inc. Pactiv Corp. - -----------------------------------------------------------------------------------------------------------------------
9 EX-2 3 ex2-2form8k_032205.txt EXHIBIT 2.2 EXHIBIT 2.2 ----------- UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - ---------------------------------------------- Chapter 11 In re Case No. 03-22945 (ASH) (Jointly Administered) THE PENN TRAFFIC COMPANY, ET AL., Debtors. - ---------------------------------------------- FIRST AMENDED DISCLOSURE STATEMENT PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE WITH RESPECT TO THE FIRST AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Kelley A. Cornish (KC/0754) Elizabeth R. McColm (EM/5342) Ross B. Rosenfelt (RR/1911) 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Attorneys for Debtors and Debtors in Possession Dated: February 4, 2005 INTRODUCTORY STATEMENT/DISCLAIMER This First Amended Disclosure Statement contains a summary of certain provisions of the First Amended Joint Plan of Reorganization dated as of February 4, 2005 (the "PLAN")(1) proposed by The Penn Traffic Company ("PENN TRAFFIC") and its subsidiaries, as debtors and debtors-in-possession (collectively, the "Debtors"), and summaries of certain other documents relating to the consummation of the Plan or the treatment of certain parties in interest, and certain financial information relating thereto. While the Debtors believe that the summaries contained herein provide adequate information with respect to the documents summarized, such summaries are qualified to the extent that they do not set forth the entire text of such documents. Before casting a ballot, each holder of an impaired claim entitled to vote on the Plan should review all pertinent documentation, including the Plan. The terms of the Plan govern in the event of any inconsistency with the summaries contained in this First Amended Disclosure Statement. No party is authorized by the Debtors to provide any information to the Debtors' creditors with respect to the Plan other than that contained in this First Amended Disclosure Statement. Other than as set forth in this First Amended Disclosure Statement or as otherwise provided by the Court, the Debtors have not authorized any representations concerning the Debtors, their anticipated financial position or operations after confirmation of the Plan or the value of their business and property. To the extent information in this First Amended Disclosure Statement relates to the Debtors, the Debtors or their advisors have provided the information in this First Amended Disclosure Statement. The information in this First Amended Disclosure Statement is being provided solely for purposes of voting to accept or reject the Plan or objecting to Confirmation of the Plan. Nothing in this First Amended Disclosure Statement may be used by any person or entity for any other purpose. The deadline for receipt by the Debtors' voting agent, Donlin, Recano & Company, Inc., of ballots voting to accept or reject the Plan is 4:00 p.m., Prevailing Eastern Time, on MARCH 9, 2005, unless extended by the Debtors or order of the Bankruptcy Court. Nothing contained in this First Amended Disclosure Statement, express or implied, is intended to give rise to any commitment or obligation of the Debtors or confers upon any person any rights, benefits or remedies of any nature whatsoever (other than as set forth in the Plan), nor should the contents of this First Amended Disclosure Statement - -------------------------- (1) Capitalized terms not defined herein have the meanings ascribed to them in the Plan unless otherwise noted. be construed as providing any legal, business, financial or tax advice. Holders of claims and interests should consult with their own advisors. The contents of this First Amended Disclosure Statement will not constitute or be construed as an admission of any fact or liability, stipulation or waiver, but rather as a statement made in settlement negotiations. Except as hereafter noted, the information contained herein is generally intended to describe facts and circumstances only as of the date of this First Amended Disclosure Statement, and neither the delivery of the First Amended Disclosure Statement nor the Confirmation of the Plan will create any implication, under any circumstances, that the information contained herein or therein is correct or complete at any time after the date hereof or thereof, or that the Debtors are or will be under any obligation to update such information in the future. 11 U.S.C. ss. 1125(b) prohibits the solicitation of an acceptance or rejection of a plan of reorganization from a holder of a claim or interest with respect to such claim or interest unless, at the time of or before such solicitation, there is transmitted to such holder such plan or a summary of such plan and a written disclosure statement approved, after notice and hearing, by the Bankruptcy Court as containing adequate information. This First Amended Disclosure Statement has not been approved or disapproved by, and the securities offered hereby have not been registered with or approved or recommended by, the Securities and Exchange Commission (the "SEC") or any securities regulatory authority of any state, nor has the SEC nor any state securities regulatory authority passed upon the accuracy or adequacy of this First Amended Disclosure Statement or the statements or information contained herein. Any representation to the contrary is a criminal offense. This First Amended Disclosure Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "SECURITIES ACT"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), that are made pursuant to the safe harbor provisions of 11 U.S.C. ss.1125 reflecting, when made, expectations or beliefs concerning future events that involve risks and uncertainties, including the ability of the Debtors to satisfy the conditions and requirements of their credit facilities, the effects of the Cases on the operations of the Debtors, the Debtors' ability to obtain court approval with respect to motions in the Cases prosecuted by them from time to time, the ability of the Debtors to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Cases, the effect of national, international and regional economic conditions, the overall level of consumer spending, the performance of the Debtors' products within the prevailing retail environment, customer acceptance of both new designs and newly introduced product lines, financial difficulties encountered by customers, the ability of the Debtors to attract, motivate and retain key executives and employees and the ability of the Debtors to attract and retain customers. ii All statements other than statements of historical facts included in this First Amended Disclosure Statement, without limitation, are forward-looking statements. Although the Debtors believe that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to have been correct. The Debtors disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements may contain the words "believe," "anticipate," "expect," "estimate," "project," "will be," "will continue," "will likely result" and other similar words and phrases. Forward-looking statements and the Debtors' plans and expectations are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, and the Debtors' business in general is subject to certain risks that could affect the value of the Debtors' stock. The unaudited projections attached hereto as EXHIBIT E (the "PROJECTIONS") have been prepared by the Debtors as projections of possible future results based upon the assumptions set forth therein, and are dependent on many factors over which the Debtors do not have control. No assurance can be given that any of the assumptions on which the Projections are based will prove to be correct. The Projections were not prepared in compliance with (i) published guidelines of the SEC, (ii) the guidelines established by the American Institute of Certified Public Accountants regarding projections or (iii) generally accepted accounting principles ("GAAP"). Peter J. Solomon Company ("PJSC"), the Debtors' investment banker and financial advisor, has not participated in the preparation of or compiled such Projections and, accordingly, does not express any view, opinion or any other form of assurance with respect to, assumes no responsibility for and disclaims any association with, such Projections. In connection with its enterprise valuation of the Reorganized Debtors, PJSC, did, however, review selected assumptions underlying the Projections. SEE Section VI.C.2.(b), entitled "Best Interests of Claim Holders - Enterprise Valuation of the Reorganized Debtors." While presented with numerical specificity, such Projections are based upon a variety of assumptions, which may not be realized, relating to the future business and operations of the Debtors and are subject to significant uncertainties and contingencies, all of which are difficult to predict and many of which are beyond the control of the Debtors. To the extent that actual results vary from the assumptions, recoveries may vary from the Projections. The Debtors do not make any express or implied representation or warranty as to the attainability of the projected financial information set forth in the Projections or as to the accuracy or completeness of the assumptions from which that projected information is derived. iii I. EXECUTIVE SUMMARY A. OVERVIEW OF CHAPTER 11 FILING The Penn Traffic Company, a Delaware corporation ("PENN TRAFFIC"), and all of its subsidiaries, as debtors and debtors-in-possession (in such capacity, the "DEBTORS"), transmit this First Amended Disclosure Statement (the "FIRST AMENDED DISCLOSURE STATEMENT") pursuant to Section 1125(b) of title 11, United States Code, 11 U.S.C. ss.ss. 101 ET SEQ. (the "CODE"), to all known impaired creditors of the Debtors entitled to vote on the Plan in connection with the solicitation of acceptances of the Plan. A copy of the Plan, which has been filed with the United States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY COURT"), is annexed hereto and made a part hereof as EXHIBIT A. On May 30, 2003 (the "PETITION DATE"), each of the Debtors filed a voluntary petition for reorganization under chapter 11 of the Code. During the Cases, the Debtors have continued to manage the operation and affairs of the Debtors as debtors-in-possession under the jurisdiction of the Bankruptcy Court. The Cases currently are pending before the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge for the Southern District of New York. Chapter 11 is the principal business reorganization chapter of the Code. Under chapter 11 of the Code, a debtor is authorized to reorganize its business for the benefit of its creditors and stockholders. In addition to permitting rehabilitation of the debtor, another goal of chapter 11 is to promote equality of treatment of creditors and equity security holders of equal rank with respect to the restructuring of debt. Recognizing the need for representation of unsecured creditors in the reorganization process, Section 1102 of the Code provides for the establishment of a creditors' committee. The Creditors' Committee in the Cases, comprised of seven creditor representatives, was appointed by the United States Trustee for the Southern District of New York on June 9, 2003. Confirmation and consummation of a plan of reorganization are the principal objectives of a chapter 11 reorganization case. A plan of reorganization sets forth the means for satisfying claims against, and interests in, a debtor. Confirmation of a plan requires, among other things, the affirmative vote of creditors holding at least two-thirds in total dollar amount and more than one-half in number of the allowed claims in each impaired class of claims that have voted on the plan, and two-thirds in amount of equity interests in each impaired class of interests that have voted on the plan. Section 1129(b) of the Code, commonly referred to as the "cramdown" provision, permits confirmation of a plan over the objection of an impaired class under certain circumstances. Confirmation of a plan of reorganization by a bankruptcy court makes the plan binding upon the debtor, any issuer of securities under the plan, any person acquiring property under the plan and any creditor or equity security holder of the debtor. Subject to certain limited exceptions, the confirmation order discharges the debtor from any debt that arose prior to the effective date of the plan and substitutes therefor the obligations, if any, specified under the confirmed plan. THE DEBTORS BELIEVE THAT THE PLAN COMPLIES WITH ALL REQUIREMENTS OF THE CODE AND PROVIDES THE BEST AVAILABLE RECOVERY TO THEIR RESPECTIVE ESTATES. THE PLAN ALSO HAS THE SUPPORT OF THE CREDITORS' COMMITTEE, WHICH WILL RECOMMEND TO ITS CONSTITUENCY THAT IT VOTE TO ACCEPT THE PLAN. THE DEBTORS URGE ALL IMPAIRED CREDITORS THAT ARE ENTITLED TO VOTE ON THE PLAN TO ACCEPT THE PLAN. B. THE FIRST AMENDED DISCLOSURE STATEMENT; VOTING REQUIREMENTS This First Amended Disclosure Statement has been approved by the Bankruptcy Court pursuant to an order dated February 4, 2005 (the "FIRST AMENDED DISCLOSURE STATEMENT APPROVAL ORDER"), as containing information of a kind and in sufficient detail to enable a hypothetical, reasonable investor typical of the holders of impaired Claims to make an informed judgment with respect to voting to accept or reject the Plan. A copy of the First Amended Disclosure Statement Approval Order is attached hereto as EXHIBIT B. This First Amended Disclosure Statement is being transmitted in connection with the Plan to provide adequate information to enable holders of Claims entitled to vote on the Plan ("VOTING CLAIMS") to make an informed judgment with respect to such vote. Approval by the Bankruptcy Court of this First Amended Disclosure Statement does not constitute an endorsement of any of the representations contained in this First Amended Disclosure Statement or in the Plan, nor does it constitute an endorsement of the fairness or merits of the Plan itself. Each holder of a Voting Claim should carefully review the material set forth in this First Amended Disclosure Statement and the exhibits hereto in order to make an independent determination as to whether to vote to accept or reject the Plan. In addition, each holder of a Voting Claim should review the entire Plan and the exhibits thereto before casting a Ballot. Accompanying this First Amended Disclosure Statement are: 1. A copy of the Plan (attached hereto as EXHIBIT A); 2. A copy of the First Amended Disclosure Statement Approval Order (attached hereto as EXHIBIT B); 3. An Organizational Chart for the Reorganized Debtors (attached hereto as EXHIBIT C); 4. Copies of the unaudited consolidated financial statements of the Debtors for the fiscal years ending February 1, 2003 and January 1, 2004 (attached hereto as EXHIBIT D); 5. The Projections relating to the Reorganized Debtors for the fiscal years ended 2005 through 2008 (attached hereto as EXHIBIT E); 2 6. The projected consolidated balance sheet for the Reorganized Debtors as of the Effective Date (attached hereto as EXHIBIT F); 7. A liquidation analysis of the Debtors (attached hereto as EXHIBIT G); 8. The notice approved by the Bankruptcy Court (attached hereto as EXHIBIT H) that sets forth, among other things, the time fixed by the Bankruptcy Court for: (a) receipt of Ballots indicating acceptance or rejection of the Plan; (b) the Confirmation Hearing; (c) filing objections to confirmation of the Plan, including, without limitation, objections to the assumption of certain executory contracts and unexpired leases under the Plan; (d) filing of administrative claims by certain parties; (e) filing claims arising from the rejection of unexpired leases and executory contracts under the Plan; and (f) filing of objections to the Debtors' proposed cure payments in connection with assumed leases and executory contracts under the Plan; and 9. A schedule reflecting the timing and amounts for the Debtors' payment of certain minimum funding contributions owing with respect to certain of Penn Traffic's single employer pension plans (attached hereto as EXHIBIT I). A ballot is enclosed with the First Amended Disclosure Statement if you are entitled to vote to accept or reject the Plan. If you hold Claims in more than one class, and you are entitled to vote in more than one Class, you will receive separate Ballots which must be used for each separate Class in which you are entitled to vote. Unless the instructions on your Ballot direct you to return your Ballot to your broker or some other person, please vote and return your Ballot(s) to: Donlin, Recano & Company, Inc. Re: The Penn Traffic Company P.O. Box 2034 Murray Hill Station New York, New York 10156 ATTENTION: Voting Department 3 If by hand delivery or overnight mail the address is: Donlin, Recano & Company, Inc. Re: The Penn Traffic Company 419 Park Avenue South, Suite 1206 New York, New York 10016 ATTENTION: Voting Department DO NOT RETURN YOUR NOTES OR SECURITIES WITH YOUR BALLOT. TO BE COUNTED, YOUR BALLOT INDICATING ACCEPTANCE OR REJECTION OF THE PLAN MUST BE ACTUALLY RECEIVED NO LATER THAN 4:00 P.M., EASTERN STANDARD TIME, ON MARCH 9, 2005. COPIES OF BALLOTS AND BALLOTS RECEIVED BY FACSIMILE WILL NOT BE COUNTED. In the First Amended Disclosure Statement Approval Order, the Bankruptcy Court set February 4, 2005 as the Record Date for voting on the Plan. Only holders of record as of February 4, 2005 who are otherwise entitled to vote under the Plan will receive a Ballot and may vote on the Plan. If you are a holder of a Claim entitled to vote on the Plan and you did not receive a Ballot, you received a damaged Ballot, you lost your Ballot, or if you have any questions concerning the First Amended Disclosure Statement, the Plan or the procedures for voting on the Plan, please call the Voting Department of Donlin, Recano & Company, Inc. at (212) 481-1411. The Bankruptcy Court has scheduled a hearing on confirmation of the Plan (the "CONFIRMATION HEARING") at 11:00 A.M., Prevailing Eastern Time, on MARCH 17, 2005, before the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge, United States Bankruptcy Court for the Southern District of New York, 300 Quarropas Street, White Plains, New York 10601. The Confirmation Hearing may be adjourned from time to time without further notice except for the announcement of such adjournment by the Bankruptcy Court at such hearing. C. SOURCES OF INFORMATION The information contained in this First Amended Disclosure Statement was derived from (i) the Debtors' books and records (such as their general purpose financial statements, books of account and corporate records) and (ii) consultations with Penn Traffic's Board of Directors and the Debtors' officers, senior management, key personnel and various of their outside professionals, including legal, accounting and financial advisors. 4 D. GENERAL STRUCTURE OF THE PLAN Each Debtor is a proponent of the Plan within the meaning of Section 1129 of the Code. In general, the Plan provides for the substantive consolidation of all of the Debtors for voting and distribution purposes only, and provides for the Debtors' reorganization pursuant to the terms of the Plan. The Plan contemplates the payment in full in cash of all administrative claims and priority claims against the Debtors, and the repayment in full in cash of outstanding amounts under the Debtors' post-petition financing facility. Furthermore, the Plan provides for the treatment of allowed claims against, and interests in, the Debtors as follows: o With respect to each holder of an allowed unsecured claim, distribution of its PRO RATA share of 100% of the newly issued common stock of Reorganized Penn Traffic issued and distributed pursuant to Sections 5.9. and 6.2. of the Plan, subject to dilution in respect of new common stock that may be issued to management of Reorganized Penn Traffic; and o No distributions on account of issued and outstanding Penn Traffic common stock, including claims arising out of or with respect to such common stock interests. After careful review of the Debtors' current business operations, estimated recoveries in sale or liquidation scenarios, the prospects of ongoing businesses, and the strategic business plan for future operations developed by the Debtors' management and discussed more fully in Section III. hereof, entitled "Future Business of the Reorganized Debtors," the Debtors have concluded that, at this time, the recovery to their creditors will be maximized by the continued operation of the Debtors, rather than a sale of some or all of the Debtors as a going concern to a third party, or an orderly liquidation. Thus, the Plan provides for the reorganization of the Debtors. A complete list of the legal entities that comprise the Debtors, the jurisdiction of incorporation and a brief description of the business purpose or activities for each entity is set forth below. This list identifies each Debtor by its case number in the Cases and designates those Debtors that are being reorganized under the Plan and, therefore, will emerge from bankruptcy as reorganized entities, as well as those Debtors that will be merged or dissolved pursuant to the Plan and, therefore, will not exist following the Effective Date of the Plan. 5
DEBTORS BEING REORGANIZED UNDER THE PLAN - ------------------------------------------------------------------------------------------------------------- NAME CASE NUMBER JURISDICTION OF INCORPORATION AND BUSINESS PURPOSE/ACTIVITY - ------------------------------------------------------------------------------------------------------------- The Penn Traffic Company 03-22945 (ASH) DELAWARE CORPORATION Parent Holding Company - ------------------------------------------------------------------------------------------------------------- Penny Curtiss Baking Company, Inc. 03-20312 (ASH) NEW YORK CORPORATION Manufacturer and distributor of fresh and frozen baked goods - ------------------------------------------------------------------------------------------------------------- Big M Supermarkets 03-22946 (ASH) NEW YORK CORPORATION Franchisor, wholesaler and service provider for independent retail grocers - ------------------------------------------------------------------------------------------------------------- Sunrise Properties, Inc. 03-22949 (ASH) PENNSYLVANIA CORPORATION Owns and leases real property for Debtors' supermarket operations - ------------------------------------------------------------------------------------------------------------- Pennway Express, Inc. 03-22948 (ASH) PENNSYLVANIA CORPORATION Trucking and freight business - ------------------------------------------------------------------------------------------------------------- Commander Foods, Inc. 03-22951 (ASH) NEW YORK CORPORATION INACTIVE - Former private label business - ------------------------------------------------------------------------------------------------------------- P&C Food Markets, Inc. of Vermont 03-22954 (ASH) VERMONT CORPORATION State Licenses Holder - ------------------------------------------------------------------------------------------------------------- PT Development, LLC 03-22956 (ASH) NEW YORK LIMITED LIABILITY CORPORATION Owner of 1% Interest in PT Fayetteville - ------------------------------------------------------------------------------------------------------------- PT Fayetteville/Utica, LLC 03-22957 (ASH) NEW YORK LIMITED LIABILITY CORPORATION Owner of real and personal property for Fayetteville, New York supermarket - ------------------------------------------------------------------------------------------------------------- DEBTORS BEING MERGED/DISSOLVED UNDER THE PLAN - ------------------------------------------------------------------------------------------------------------- NAME CASE NUMBER JURISDICTION OF INCORPORATION AND BUSINESS PURPOSE/ACTIVITY - ------------------------------------------------------------------------------------------------------------- Abbott Realty Corporation 03-22952 (ASH) VERMONT CORPORATION ACTIVE - Real property leasing - ------------------------------------------------------------------------------------------------------------- Big Bear Distribution Company 03-22950 (ASH) DELAWARE CORPORATION INACTIVE - Former transportation company - ------------------------------------------------------------------------------------------------------------- Bradford Supermarkets, Inc. 03-22955 (ASH) VERMONT CORPORATION INACTIVE - Former real property leasing - ------------------------------------------------------------------------------------------------------------- Dairy Dell, Inc. 03-22947 (ASH) PENNSYLVANIA CORPORATION INACTIVE- Former dairy products distributor - -------------------------------------------------------------------------------------------------------------
6 E. SUMMARY OF THE TREATMENT UNDER THE PLAN OF HOLDERS OF CLAIMS AND INTERESTS The following summary is qualified in its entirety by reference to the Plan and to the more detailed description of provisions for the Classes created under the Plan set forth in Section IV. hereof, entitled "Summary of the Plan of Reorganization." This First Amended Disclosure Statement contains only a summary of the terms of the Plan. It is the Plan (as may be modified by the Confirmation Order) and not this First Amended Disclosure Statement that governs the rights and obligations of the parties.
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN (2) ESTIMATE OF AGGREGATE ESTIMATED CLASS DESCRIPTION ALLOWED CLAIM AMOUNT(3) TREATMENT RECOVERY (%) - ----- ----------- ----------------------- --------- ------------ UNIMPAIRED AND NON-VOTING: PAID ADMINISTRATIVE TO BE DETERMINED,3 IN FULL IN CASH (I) AT THE SOLE 100% CLAIMS - GENERAL INCLUDING AN OPTION OF THE DEBTORS (BEFORE THE ESTIMATED $4 - $6 EFFECTIVE DATE) OR THE REORGANIZED MILLION ON ACCOUNT OF DEBTORS (ON OR AFTER THE EFFECTIVE RECLAMATION CLAIMS DATE), (A) IN THE ORDINARY COURSE UNDER SECTION 546(C) OF BUSINESS AS THE CLAIM BECOMES OF THE CODE DUE AND OWING OR (B) ON THE INITIAL DISTRIBUTION DATE OR (II) ON SUCH OTHER DATE AS THE BANKRUPTCY COURT MAY ORDER. ADMINISTRATIVE $3.5 MILLION SUBJECT TO SECTION 2.1.(F) OF THE 100% CLAIMS - PBGC PLAN, PBGC WILL BE PAID $3.5 ALLOWED MILLION BI-ANNUALLY OVER A PERIOD ADMINISTRATIVE CLAIM OF 2 YEARS IN FOUR EQUAL INSTALLMENTS COMMENCING ON THE DATE THAT IS SIX MONTHS FOLLOWING THE EFFECTIVE DATE OF THE PLAN, AND SUCH PBGC ALLOWED ADMINISTRATIVE CLAIM WILL BE SECURED BY A POST-EFFECTIVE DATE TRADE LIEN.
- --------------------------- (2) This table is only a summary of the classification and treatment of Claims and Interests under the Plan. Reference should be made to the entire Disclosure Statement and the Plan for a complete description of the classification and treatment of Claims and Interests. The estimates set forth in this table are as of the date of this Disclosure Statement and are for descriptive purposes only, and do not and will not constitute an admission as to the Debtors' obligations with respect to any Claim. (3) Estimate does not include (i) pre-confirmation professional fees which will be paid upon the approval of final fee applications post-confirmation, and (ii) administrative liabilities to be paid in the ordinary course of business. 7
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN (2) ESTIMATE OF AGGREGATE ESTIMATED CLASS DESCRIPTION ALLOWED CLAIM AMOUNT(3) TREATMENT RECOVERY (%) - ----- ----------- ----------------------- --------- ------------ ADMINISTRATIVE TO BE DETERMINED SUBJECT TO SECTIONS 2.1.(D) AND 100% CLAIMS - PJSC 6.4.(A) OF THE PLAN, PJSC WILL BE REORGANIZATION FEE PAID A REORGANIZATION FEE OF $2,250,000.00 LESS THE AGGREGATE AMOUNT OF MONTHLY ADVISORY FEES PAID TO PJSC AS OF THE EFFECTIVE DATE (AT $100,000.00 PER MONTH). ADMINISTRATIVE TO BE DETERMINED SUBJECT TO BANKRUPTCY COURT 100% CLAIMS - KZCS APPROVAL, KZCS WILL BE PAID A SUCCESS FEE SUCCESS FEE AS FOLLOWS: (I) $2.75 MILLION UPON ENTRY OF AN APPROVAL ORDER OF THE BANKRUPTCY COURT; (II) $1 MILLION WHEN THE "AGGREGATE UNSECURED CREDITOR RECOVERY" ("AUCR," AS DEFINED BELOW) EXCEEDS 25%; AND (III) $1.25 MILLION WHEN THE AUCR EXCEEDS 30%. AUCR MEANS THE 30 DAY AVERAGE DAILY CLOSING TRADING PRICE OF THE NEW PENN TRAFFIC COMMON SHARES, MULTIPLIED BY THE 30 DAY AVERAGE OF THE NUMBER OF NEW PENN TRAFFIC COMMON SHARES ISSUED AND OUTSTANDING, DIVIDED BY THE 30 DAY AVERAGE OF THE AGGREGATE AMOUNT OF ALLOWED CLASS 3 CLAIMS. SUCH CALCULATION WILL BE PERFORMED AFTER THE EFFECTIVE DATE DAILY BEGINNING ON THE 120TH DAY AFTER PUBLIC TRADING OF THE NEW PENN TRAFFIC COMMON SHARES COMMENCES, AND SHALL CONTINUE THROUGH THE 485TH DAY THEREAFTER. ADMINISTRATIVE TO BE DETERMINED UPON THE INITIAL DISTRIBUTION 100% CLAIMS -DEMME DATE, MR. DEMME WILL BE PAID A SUCCESS BONUS SUCCESS BONUS BASED ON THE PERCENTAGE RECOVERIES ON ALLOWED UNSECURED CLAIMS AS FOLLOWS: (X) FOR RECOVERIES UP TO 10%, THE SUCCESS BONUS WILL BE $250,000.00; AND (Y) FOR EACH ADDITIONAL 1% OF RECOVERIES ABOVE 10%, THE SUCCESS BONUS WILL BE INCREASED BY AN ADDITIONAL $20,000.00. PRIORITY TAX CLAIMS $5 - $6 MILLION UNIMPAIRED AND NON-VOTING: AT THE 100% REORGANIZED DEBTORS' OPTION, (I) PAID IN CASH EQUAL TO THE AMOUNT OF SUCH CLAIM ON THE INITIAL DISTRIBUTION DATE, OR (II) PAID IN CASH IN SIX EQUAL ANNUAL INSTALLMENTS, TOGETHER WITH INTEREST THEREON AT THE LEGAL RATE REQUIRED FOR SUCH CLAIMS IN CHAPTER 11 CASES, WHICH INTEREST WILL BE PAID ANNUALLY IN ARREARS PURSUANT TO SECTION 1129(A)(9)(C) OF THE CODE.
8
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN (2) ESTIMATE OF AGGREGATE ESTIMATED CLASS DESCRIPTION ALLOWED CLAIM AMOUNT(3) TREATMENT RECOVERY (%) - ----- ----------- ----------------------- --------- ------------ DIP FACILITY CLAIMS $30 - $40 MILLION UNIMPAIRED AND NON-VOTING: PAID 100% IN FULL, IN CASH, OR OTHERWISE SATISFIED IN A MANNER ACCEPTABLE TO THE DIP LENDERS. POST-PETITION TRADE $15.3 MILLION UNIMPAIRED AND NON-VOTING: PAID 100% LIEN CLAIMS IN FULL, IN CASH, ON THE DATE ON WHICH, IN THE ORDINARY COURSE OF BUSINESS, SUCH ALLOWED TRADE LIEN CLAIM BECOMES DUE AND OWING. IF THE REORGANIZED DEBTORS IMPLEMENT A POST-EFFECTIVE DATE TRADE LIEN PROGRAM, THEN EACH HOLDER OF AN ALLOWED TRADE LIEN CLAIM WILL ALSO SHARE PARI PASSU IN ANY POST-EFFECTIVE DATE TRADE LIEN ON THE TERMS AND CONDITIONS DESCRIBED IN SECTION 5.17. OF THE PLAN. 1 PRIORITY NON-TAX $0 UNIMPAIRED AND NON-VOTING (DEEMED 100% CLAIMS TO HAVE ACCEPTED THE PLAN): PAID IN FULL IN CASH ON THE LATER OF THE INITIAL DISTRIBUTION DATE AND A DATE THAT IS AS SOON AS PRACTICABLE AFTER THE DATE UPON WHICH SUCH PRIORITY NON-TAX CLAIM BECOMES AN ALLOWED PRIORITY NON-TAX CLAIM.
9
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN (2) ESTIMATE OF AGGREGATE ESTIMATED CLASS DESCRIPTION ALLOWED CLAIM AMOUNT(3) TREATMENT RECOVERY (%) - ----- ----------- ----------------------- --------- ------------ 2 OTHER SECURED $4.2 MILLION UNIMPAIRED AND NON-VOTING (DEEMED 100% CLAIMS TO HAVE ACCEPTED THE PLAN): AT THE SOLE OPTION OF THE DEBTORS, (I) PAID IN FULL IN CASH ON THE INITIAL DISTRIBUTION DATE, (II) REINSTATED ACCORDING TO THE TERMS OF THE RELEVANT INSTRUMENT, (III) PAID ON SUCH OTHER TERMS AS THE DEBTORS AND THE HOLDER OF SUCH CLAIM MAY AGREE, OR (IV) SATISFIED THROUGH THE SURRENDER BY THE APPLICABLE DEBTOR OF THE COLLATERAL SECURING THE CLAIM TO THE HOLDER THEREOF. EACH OF THE BLAIRSVILLE PROPERTY CLAIM AND THE CLARION PROPERTY CLAIM WILL BE ALLOWED CLASS 2 "OTHER SECURED CLAIMS" UNDER THE PLAN. NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF SECTION 1124(2) OF THE BANKRUPTCY CODE, THE BLAIRSVILLE PROPERTY MORTGAGE DOCUMENTS AND THE CLARION PROPERTY MORTGAGE DOCUMENTS WILL BE REINSTATED AND REAFFIRMED IN ACCORDANCE WITH THEIR TERMS AS PROVIDED IN SECTION 2.7.(C)(II) OF THE PLAN, AND SUCH AGREEMENTS WILL CONTINUE IN FULL FORCE AND EFFECT FOLLOWING THE EFFECTIVE DATE. 3 UNSECURED CLAIMS $295 - $305 MILLION IMPAIRED AND VOTING: EACH HOLDER 40% - 42% OF AN ALLOWED UNSECURED CLAIM WILL RECEIVE (I) ITS PRO RATA SHARE OF 100% OF THE NEW PENN TRAFFIC COMMON SHARES, SUBJECT TO (A) DILUTION RESULTING FROM THE ISSUANCE OF ADDITIONAL NEW PENN TRAFFIC COMMON SHARES UPON THE EXERCISE OF OPTIONS TO PURCHASE NEW PENN TRAFFIC COMMON SHARES GRANTED TO MANAGEMENT OF REORGANIZED PENN TRAFFIC PURSUANT TO THE MANAGEMENT STOCK INCENTIVE PROGRAM AND (B) SUCH ADJUSTMENTS TO THE TOTAL ISSUED NEW PENN TRAFFIC COMMON SHARES AS MAY OCCUR PURSUANT TO SECTION 6.3.(A) OF THE PLAN, AND (II) ITS PRO RATA SHARE OF ALL TRUST RECOVERIES, IF ANY. 4 CONVENIENCE CLAIMS $3.1 MILLION IMPAIRED AND VOTING: CLAIMS IN THE 15% AMOUNT OF $5,000.00 OR LESS WILL BE ALLOWED AS CONVENIENCE CLAIMS IN THE AMOUNT FILED OR SCHEDULED, AND CLAIMS VOLUNTARILY REDUCED TO $5,000.00 BY BALLOT ELECTION WILL BE ALLOWED AS CONVENIENCE CLAIMS IN THE AMOUNT OF $5,000.00. EACH HOLDER OF AN ALLOWED CONVENIENCE CLAIM WILL RECEIVE CASH EQUAL TO 15% OF ITS ALLOWED CLAIM; PROVIDED, HOWEVER, THAT A HOLDER OF MORE THAN ONE ALLOWED CONVENIENCE CLAIM, WHICH CLAIMS IN THE AGGREGATE EXCEED $5,000.00, MAY ELECT TO BE TREATED WITH RESPECT TO AND IN THE AMOUNT OF SUCH AGGREGATED CLAIM, AS A CLASS 3 CLAIMHOLDER FOR DISTRIBUTION PURPOSES ONLY.
10
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN (2) ESTIMATE OF AGGREGATE ESTIMATED CLASS DESCRIPTION ALLOWED CLAIM AMOUNT(3) TREATMENT RECOVERY (%) - ----- ----------- ----------------------- --------- ------------ 5 INTERCOMPANY CLAIMS IMPAIRED AND NON-VOTING (DEEMED N/A NOT TO HAVE ACCEPTED THE PLAN): INTERCOMPANY CLAIMS WILL BE DISCHARGED, AND THE HOLDERS OF INTERCOMPANY CLAIMS WILL NOT BE ENTITLED TO RECEIVE OR RETAIN ANY PROPERTY ON ACCOUNT OF SUCH CLAIMS; PROVIDED, HOWEVER, THAT PRIOR TO DISCHARGE THE DEBTORS HAVE THE RIGHT TO RETAIN OR EFFECT SUCH TRANSFERS AND SET OFFS WITH RESPECT TO INTERCOMPANY CLAIMS AS THEY DEEM APPROPRIATE FOR ACCOUNTING, TAX AND COMMERCIAL BUSINESS PURPOSES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW. 6 COMMON STOCK CLAIMS NOT ESTIMATED IMPAIRED AND NON-VOTING (DEEMED 0% AND INTERESTS NOT TO HAVE ACCEPTED THE PLAN): INTERESTS WILL BE CANCELLED, AND THE HOLDERS OF COMMON STOCK CLAIMS AND INTERESTS WILL NOT BE ENTITLED TO RECEIVE OR RETAIN ANY PROPERTY ON ACCOUNT OF SUCH CLAIMS AND INTERESTS.
F. CONDITIONS TO EFFECTIVENESS OF THE PLAN The Bankruptcy Court has scheduled a hearing to consider confirmation of the Plan for March 17, 2005 at 11:00 a.m. The Code imposes a number of voting and other requirements as conditions to the confirmation of a plan of reorganization. These Code requirements are described in Section VI.B. hereof, entitled "Confirmation Requirements Under the Code." In addition, certain conditions specified in the Plan must be satisfied or waived prior to the Effective Date of the Plan in order for the Plan to become effective. A summary of these conditions is set forth in Section IV.E. hereof, entitled "Conditions to Effective Date," and reference is made to the terms of the Plan, which is attached hereto as EXHIBIT A. II. DESCRIPTION OF THE DEBTORS AND THE DEBTORS' BUSINESSES A. BACKGROUND INFORMATION REGARDING THE DEBTORS 1. OVERVIEW OF HISTORY AND OPERATIONS (a) GENERALLY Penn Traffic is one of the leading food retailers in the Eastern United States, with projected revenues in FY2005 of $1.3 billion. As of the petition date, Penn Traffic operated 213 supermarkets within a six state area with revenue of $2.3 billion. Penn Traffic currently operates 111 supermarkets and two stand-alone pharmacies located throughout upstate New York, Vermont, New Hampshire and Pennsylvania operating under the "P&C," "Quality," and "Bi-Lo" trade names. In addition to its retail 11 operations, Penn Traffic serves as a wholesaler for approximately 83 licensed franchises and 36 independent operators, operates distribution facilities in New York and Pennsylvania, and owns and operates a bakery processing plant in Syracuse, New York. Dairy Dell, Inc. is a Pennsylvania corporation that formerly was a distributor of dairy products, but presently is an inactive corporation; Penny Curtiss Baking Company, Inc. is a New York corporation that manufactures and distributes fresh and frozen baked goods for distribution to Penn Traffic's stores as well as to unrelated stores; Big M Supermarkets, Inc., a New York corporation, is a franchisor, wholesaler and service provider for various independent retail grocers. Sunrise Properties, Inc. is a Pennsylvania corporation that owns and leases real property, primarily in connection with the Debtor's supermarket operations; Pennway Express, Inc. is a Pennsylvania corporation that operates a trucking and freight business; Big Bear Distribution Company is a Delaware corporation that formerly operated a transportation company, but presently is an inactive corporation. Commander Foods, Inc. is a New York corporation that formerly was involved in the Debtors' private label business but presently is an inactive corporation. Abbott Realty Corporation is a Vermont corporation that leases real property for supermarkets. Bradford Supermarkets, Inc. is a Vermont corporation that formerly used to lease real property for supermarkets, but presently is inactive. P&C Food Markets, Inc. of Vermont is a Vermont corporation that holds certain Vermont state licenses. PT Development, LLC is a New York limited liability company that holds a 1% interest in PT Fayetteville/Utica, LLC, the New York limited liability company that owns the real and personal property for a supermarket in Fayetteville, New York. (b) BUSINESS SEGMENTS Penn Traffic is the successor to a retail food business which dates back to 1854. Through a series of acquisitions and mergers, Penn Traffic, together with its subsidiaries (collectively, the "COMPANY"), has grown to become a leader in the eastern U.S. food retail and wholesale industries. The Company's businesses are classified by its management into two primary segments: (i) Retail Food Business (the "RETAIL FOOD Business") and (ii) Wholesale Food Distribution Business (the "WHOLESALE FOOD DISTRIBUTION BUSINESS"). (i) Retail Penn Traffic is a major retailer currently operating in the areas of New York, Vermont, New Hampshire and Pennsylvania. The Company currently operates 111 supermarkets and two stand-alone pharmacies in communities with diverse economics and demographics. The average annual revenue per store was, as of October 30, 2004, ($9,406,761.00). Penn Traffic trade names generally have leading market position and high community acceptance. Penn Traffic's supermarkets offer a broad selection of grocery, meat, poultry, seafood, dairy, fresh produce, delicatessen, bakery and frozen food products. The stores also offer non-food products and services such as health and beauty care 12 products, housewares, general merchandise, and in many cases, pharmacies, floral items and banking services. Penn Traffic's store sizes and formats vary widely, depending upon the demographic conditions in each location. For example, "conventional" store formats are generally more appropriate in areas of low population density; larger populations are better served by full-service supermarkets of up to 75,000 square feet, which offer an increased variety of merchandise and numerous expanded service departments such as bakeries, delicatessens, floral departments and fresh seafood departments. The net revenues for the Retail Food Business segment for the 52-week period ending October 31, 2004 were approximately $1.03 billion that accounted for approximately 80% of the Company's overall revenues of $1.3 billion. (ii) Wholesale Penn Traffic currently supplies 119 independently operated supermarkets with a wide variety of food and non-food products from its distribution centers in New York and Pennsylvania. These customers of the Company's wholesale food distribution business are primarily located in upstate New York and western Pennsylvania. As part of Penn Traffic's wholesale food distribution business, the Company licenses, royalty-free, the use of its "Riverside," "Bi-Lo" and "Big M" names to 83 of these independently owned supermarkets that are required to maintain certain quality and other standards. The majority of these independent stores use Penn Traffic as their primary wholesaler and also received advertising, accounting, merchandising and retail counseling services from Penn Traffic. In addition, Penn Traffic receives rent from 30 of the licensed independent operators which lease or sublease their supermarkets from Penn Traffic. The Company's wholesale food distribution business contributes to the Company's operating income and enables the Company to spread fixed and semi-fixed procurement and distribution costs over additional revenues. The net revenues for the Wholesale Food Distribution Business segment for the 52-week period ending October 30, 2004 were approximately $223.4 million, which accounted for 17% of the Company's overall revenues for that period. (iii) Food Processing Operations Penn Traffic also owns and operates Penny Curtiss, a bakery processing plant in Syracuse, New York. Penny Curtiss manufactures and distributes fresh and frozen bakery products to Penn Traffic's stores and third parties, including customers of Penn Traffic's wholesale food distribution business. (c) OPERATIONS Penn Traffic is a large-volume procurer of products purchased for resale through its Retail Food and Wholesale Food Distribution segments. Penn Traffic's purchases are generally of sufficient volume to qualify for minimum price brackets for 13 most items. Penn Traffic purchases brand name grocery merchandise directly from national and regional manufacturers. The Company also purchases private label products and certain other food products from TOPCO Associates, Inc., a national products purchasing cooperative comprising 53 regional supermarket chains and other food distributors. For Fiscal 2003, purchases from TOPCO Associates accounted for approximately 22% of Penn Traffic product purchases. Penn Traffic's primary New York distribution centers include a company-owned 514,000 square foot dry grocery facility and a company-owned 241,000 square foot perishable products facility, both in Syracuse, New York and a company-owned 274,000 square foot general merchandise and health and beauty care items facility in Jamestown, New York. The company also leases a 126,000 square foot bakery manufacturing plant in Syracuse, New York. As of the Petition Date, the Company's primary Ohio distribution centers located in Columbus, Ohio included a leased 492,000 square foot dry grocery facility, a company-owned 208,000 square foot perishable products facility and a leased 233,000 square foot general merchandise facility. As will be described in further detail below, the Company determined that its successful reorganization depended, in part, on the cessation of business operations in Ohio and West Virginia under the Big Bear trade name and the sale of substantially all of the Big Bear assets. Accordingly, Penn Traffic has disposed of substantially all of its Big Bear assets, including, but not limited to, all leased and fee-owned property associated with the Big Bear banner. Penn Traffic's primary Pennsylvania distribution centers located in DuBois, Pennsylvania include a company-owned 390,000 square foot dry grocery facility and a company-owned 195,000 square foot perishable products facility. Approximately two-thirds of the merchandise offered in Penn Traffic's retail stores is distributed from its warehouses by its fleet of tractors, refrigerated trailers and dry trailers. Merchandise not delivered from Penn Traffic's warehouses is delivered directly to the stores by manufacturers, distributors, vendor drivers and sales representatives for such products as beverages, snack foods and bakery items. (d) COMPETITION The food retailing business is highly competitive and may be affected by general economic conditions. The number of competitors and the degree of competition encountered by Penn Traffic's supermarkets vary by location. Penn Traffic competes with several multi-regional, regional and local supermarket chains, convenience stores, stores owned and operated and otherwise affiliated with large food wholesalers, unaffiliated independent food stores, warehouse clubs, discount drug store chains, discount general merchandise chains, "supercenters" (combination supermarket and general merchandise stores) and other retailers. Many of these competitors are significantly larger than Penn Traffic, have vastly greater resources and purchasing power than Penn Traffic, in some cases can obtain more favorable terms from landlords, are better capitalized than Penn Traffic and do not have employees affiliated with unions. 14 During calendar years 2002, 2003 and the first half of 2004, the Company encountered an increase in competitive price and promotional activity. This resulted from, among other factors, the sluggish sales environment in the supermarket industry, which the Company believes was caused by weakening economic conditions and an increase in the penetration of the retail food industry by alternative channels of trade such as supercenters. In addition, during that time period, a greater number of competitive new stores (including a greater number of supercenters) opened in the Company's markets than in recent years. During calendar year 2000, two new competitors entered the central Ohio market in which Penn Traffic operated a number of stores under the Big Bear trade name. As a consequence of the entry of these new competitors and the current challenging retail environment, the Company faced increased competition from these new competitors and from the two other established competitors in the central Ohio market who reduced prices and/or increased their level of promotional activity in an attempt to maintain or improve their sales levels in the market. The increased competition in the Company's Ohio market had an adverse effect on the Company's performance and results of operations in this market during Fiscal 2003. As a result of these competitive processes and continued declining performances from its Ohio and West Virginia operations, Penn Traffic, as part of its reorganization efforts, decided to cease operations under the Big Bear trade name and has disposed of substantially all of its assets in these two states during the Chapter 11 Cases. SEE Section II.C.10. entitled "Restructuring of the Debtors' Businesses." (e) EMPLOYEES Labor costs and their impact on product prices are important competitive factors in the supermarket industry. The Company has experienced significant increased employee benefit costs in all of its markets and these increased costs have had an adverse effect on the Company's results of operations. As of the Petition Date, Penn Traffic had approximately 12,130 hourly employees and 4,200 salaried employees. As of June 1, 2004, Penn Traffic has substantially reduced its workforce to 8,807 employees of which 6,592 are hourly employees and 2,215 salaried employees. (f) UNIONS As of the Petition Date, approximately 74% of the Debtors' employees throughout their various store, warehousing and manufacturing locations were members of one of four trade unions: the United Food and Commercial Workers Union, the Teamsters, the Bakery and Confectionary Workers Union and the United Industrial Workers Union. As of June 1, 2004, as a result of the Debtors' closure of the Big Bear supermarket chain, of its remaining 8,807 employees, 7,192 employees (approximately 82%), are members of one of three trade unions: the United Food and Commercial Workers Union, the Teamsters or the Bakery and Confectionary Workers Union (the "UNION EMPLOYEES"). These Union Employees are currently covered by 18 collective bargaining agreements, 10 of which have expired and are in the process of being renegotiated. The Company believes that it is critical to its ability to successfully reorganize to modify certain terms of its collective bargaining agreements in order to 15 make it economically feasible to continue in business. The Company is continuing in its good faith negotiations with certain of the Unions with respect to such modifications. The Company reserves the right to seek a Bankruptcy Court order under Section 1113 of the Bankruptcy Code to modify such agreements in the event that the necessary modifications are not achieved by agreement with the Unions. (g) THE COMPANY'S RETIREMENT PLANS Various retirement plans together cover the Company's entire workforce. The Company itself sponsors five defined benefit pension plans (collectively, the "PENSION PLANS"): (i) The Penn Traffic Company Cash Balance Pension Plan; (ii) Pension Plan for Bargaining Employees of Eastern Pennsylvania; (iii) The Riverside Division of Penn Traffic Company Bargaining Employees Pension Plan; (iv) Big Bear Stores Hourly Paid Food Warehouse Employees' Pension Plan; and (v) Big Bear Stores Hourly Paid General Merchandise Warehouse Employees' Pension Plan. Participation in the Company-sponsored Pension Plans is as follows:
- ------------------------------------------------------------------------------------------------ CASH BALANCE PLAN BIG BEAR FW PLAN BIG BEAR GM PLAN EASTERN PA PLAN RIVERSIDE PLAN - ------------------------------------------------------------------------------------------------ Active: 3,540 Active: 202 Active: 24 Active: 84 Active: 1,700 Inactive:183 Inactive: 5 Inactive: 2 Retired: 27 Retired: 774 Retired: 1,311 Retired: 91 Retired: 78 Terminated: 101 Terminated: 1,197 Terminated: 4,406 Terminated: 169 Terminated: 101 Total: 212 Total: 3,671 Total: 9,440 Total: 467 Total: 205 As of 1/1/2003 As of 12/1/2002 As of 1/1/2004 As of 6/1/2003 As of 6/1/2003 - ------------------------------------------------------------------------------------------------
In addition, some of the Company's union workers receive pensions through union-sponsored "multiemployer pension plans." These plans provide benefits to employees of unrelated employers which have been required to join the plans pursuant to collective bargaining agreements. As of the Petition Date, the Company contributed to the following multiemployer pension plans: (i) UFCW Local One Pension Fund; (ii) UFCW Pension Fund of Northeastern PA; (iii) New York State Teamsters Conference Pension & Retirement Fund; (iv) Bakery & Confectionary Workers Union & Industry International Pension Fund and (v) Central States Southeast and Southwest Areas Pension Funds. As of the Petition Date, participation in the multiemployer pension plans was as follows: 16
------------------------------------------------------------------------------------------ UFCW LOCAL ONE UFCW PENSION CENTRAL STATES NEW YORK STATE BAKERY & PENSION PLAN FUND OF SOUTHEAST AND TEAMSTERS CONFECTIONARY NORTHEASTERN PA SOUTHWEST AREAS CONFERENCE PENSION WORKERS PENSION FUNDS & RETIREMENT FUND UNION & INDUSTRY PENSION FUNDS - ------------------------------------------------------------------------------------------------------------- UNION CONTRACTS Quality Bi-Lo East (Old Big Bear Drivers P&C Warehouse Penny Curtiss REQUIRING PTC TO Markets Master Acme) Big Bear Dispatch P&C Trans. #317 Frozen CONTRIBUTE P&C Master P&C Trans. #294 Penny Curtiss Quality P&C Building Fresh Markets Maintenance Buffalo Area P&C Quality Refrigeration & Markets Maintenance Warehouse - ------------------------------------------------------------------------------------------------------------- AGGREGATE 6120 349 77 581 210 PARTICIPATING EMPLOYEES - -------------------------------------------------------------------------------------------------------------
Separate and apart from the pension plans described above, the Company maintains a defined contribution 401(k) plan for all of its employees which gives them an opportunity to save for retirement with pre-tax payroll deductions. The Company also adds matching contributions to the 401(k) plan on behalf of all non-union employees (the matching contributions equal 50% of each non-union employee's pre-tax payroll deductions up to 3% of his or her compensation, for a maximum matching contribution of 1.5% of pay). As a result of recent declines in interest rates and the market value of the assets held in the Company's five single employer Pension Plans, the Debtors have accrued significant pension liabilities. All of the Company's Pension Plans will require funding contributions over the next five years, as follows: (4) - -------------------------- (4) The following projections reflect the interest rate relief provided under the Pension Funding Equity Act of 2004. 17
- ------------------------------------------------------------------------------------------------------------- PENSION FUNDINGS - ------------------------------------------------------------------------------------------------------------- Plan year 2004 2005 2006 2007 beginning in: - ------------------------------------------------------------------------------------------------------------- Assumed Weighted 6.55% 5.99% 5.65% 5.49% Average Rate used to determine current liability - ------------------------------------------------------------------------------------------------------------- PROJECTIONS BASED ON 9% ANNUAL RETURN ON ASSETS: - ------------------------------------------------------------------------------------------------------------- FISCAL YEAR JANUARY 2005 JANUARY 2006 JANUARY 2007 JANUARY 2008 TOTAL FOUR-YEAR ENDING: PROJECTIONS - ------------------------------------------------------------------------------------------------------------- Cash Balance Plan 24,535,000 9,456,000 7,243,000 7,034,000 48,268,000 - ------------------------------------------------------------------------------------------------------------- Big Bear Food Warehouse 3,402,078 1,552,428 791,588 398,420 6,144,514 - ------------------------------------------------------------------------------------------------------------- Big Bear General Merchandise 1,481,449 664,063 255,746 126,555 2,527,813 - ------------------------------------------------------------------------------------------------------------- Eastern Pennsylvania 0 171,198 154,331 151,096 476,626 - ------------------------------------------------------------------------------------------------------------- Riverside Bargaining 5,998,485 2,885,904 2,925,439 2,975,945 14,785,773 - ------------------------------------------------------------------------------------------------------------- TOTAL 35,417,012 14,729,593 11,370,104 10,686,016 72,202,725 - -------------------------------------------------------------------------------------------------------------
As indicated above, the Cash Balance Pension Plan, which is the principal retirement plan for the Company's non-union employees, requires over $48 million in funding over the next four years, including a payment in excess of approximately $24.5 million in fiscal year 2005. As described more fully in Section II.C.14. hereof entitled "The PBGC Settlement," the Debtors, in consultation with their financial advisors and the Creditors' Committee, have determined that, unless the Cash Balance Pension Plan is terminated, the Company will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process. Accordingly, in May 2004, the Debtors filed an application with the Pension Benefit Guaranty Corporation (the "PBGC") for a distress termination of the Cash Balance Pension Plan under Section 4041(c)(2)(B)(iii) of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ss.ss. 1301-1461 (2000) ("ERISA"). PBGC is processing the Debtors' application for a distress termination of the Cash Balance Pension Plan pursuant to the PBGC Settlement, described in Section II.C.14. hereof. Moreover, the Debtors assert that they have a valid $2 million preference claim under Section 547 of the Bankruptcy Code arising from the Debtors' advance payment of a $2 million minimum funding contribution to the Cash Balance Pension Plan on March 18, 2003. 18 (h) GOVERNMENT REGULATIONS Penn Traffic's food and drug business requires it to hold various licenses and to register certain of its facilities with state and federal health, drug and alcoholic beverage regulatory agencies. By virtue of these licenses and registration requirements, Penn Traffic is obligated to observe certain rules and regulations; a violation of such rules and regulations could result in a suspension or revocation of licenses or registrations. Most of Penn Traffic's licenses require periodic renewals. Penn Traffic has experienced no material difficulties with respect to obtaining, retaining or renewing its licenses and registrations. The Company believes that for a period of time prior to March 2003 it may have inadvertently and unintentionally failed to comply with certain federal and state franchise registration and disclosure requirements which may be applicable to the Company's wholesale food distribution franchise program. Specifically, it appears that the Company may have inadvertently and unintentionally failed to furnish to certain of its wholesale food distribution franchisees, prior to offering wholesale food distribution franchises to them, the "franchise disclosure document" required by New York law and a regulation of the Federal Trade Commission. While the Company's failure to furnish in advance a franchise disclosure document to certain of its wholesale food distribution franchisees may place it in violation of the aforementioned federal regulation and New York statute, the Company believes that it is likely that the pertinent federal and state regulators will settle the matter with the Company without the imposition of material penalties. In addition, certain of the Company's wholesale food distribution franchisees in New York State may be entitled to assert private claims as a result of the Company's inadvertent failure to furnish to them the required franchise disclosure document. However, the Company is considering offering such franchisees a right of rescission, which whether accepted or rejected will thereafter negate the ability of any such franchisee thereafter to assert a private claim under New York's franchise law. While (i) the penalties the Company may be required to pay following its contemplated settlements with the Federal Trade Commission and the State of New York, (ii) the effects of any rescission offer accepted by any of the Company's wholesale food distribution franchisees to whom rescission may be offered in the future or (iii) any judgments entered with respect to any private claims would have an adverse effect on the profitability of the Company's wholesale food distribution business, the Company does not believe that this matter will have a material adverse effect on the Company's financial condition and/or the results of its operations. (i) PROPERTIES Penn Traffic presently owns 21 and leases 88 of the supermarkets that it operates and two stand-alone pharmacies. The leased supermarkets are operated under leases expiring from 2004 to 2027, excluding option periods. In addition, Penn Traffic owns or leases 35 supermarket locations which are leased or subleased to independent operators. 19 As of the Petition Date, Penn Traffic owned five shopping centers that contain company-owned or licensed supermarkets and owned or leased distribution centers in Syracuse and Jamestown, New York; Columbus, Ohio; and DuBois, Pennsylvania; and a bakery manufacturing plant in Syracuse, New York. Penn Traffic owns or leases a fleet of trucks and trailers, fixtures and equipment utilized in its business and certain miscellaneous real estate. Since the Petition Date, Penn Traffic has been actively marketing some of its non-core real property assets and has disposed of these assets as set forth in Section II.C.10. 2. PRE-PETITION CAPITAL STRUCTURE (a) THE 1999 RESTRUCTURING On March 1, 1999 (the "PREVIOUS PETITION DATE"), Penn Traffic and certain of its subsidiaries filed petitions for relief (the "PREVIOUS BANKRUPTCY CASES") under Chapter 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the "DELAWARE BANKRUPTCY COURT"). The Previous Bankruptcy Cases were commenced to implement a pre-negotiated financial restructuring of the Company. On May 27, 1999, the Delaware Bankruptcy Court confirmed the Company's chapter 11 plan of reorganization (the "PREVIOUS Plan") and on June 29, 1999, the Previous Plan became effective in accordance with its terms. Consummation of the Previous Plan resulted in (1) the former $732.2 million principal amount of the Company's senior notes being exchanged for $100 million of senior notes and 19,000,000 shares of the Company's newly-issued common stock, par value $.01 per share (the "COMMON STOCK"), (2) the former $400 million principal amount of senior subordinated notes being exchanged for 1,000,000 shares of Common Stock and six-year warrants (the "WARRANTS") to purchase 1,000,000 shares of Common Stock having an exercise price of $18.30 per share, (3) holders of Penn Traffic's formerly issued common stock receiving one share of Common Stock for each 100 shares of common stock held immediately prior to the Petition Date, for a total of 106,955 new shares and (4) the cancellation of all outstanding options and warrants to purchase shares of the Company's former common stock. The Previous Plan also provided for the issuance to officers and key employees of options to purchase up to 2,297,000 shares of Common Stock. The Previous Plan provided for payment in full of all of the Company's obligations to its other creditors. On the effective date of the Previous Plan, Penn Traffic, Dairy Dell, Penny Curtiss and Big M (the "BORROWERS") entered into that certain Revolving Credit and Term Loan Agreement (as further amended, modified or supplemented thereafter, the "PRE-PETITION CREDIT AGREEMENT") with certain banks and financial institutions (the "PRE-PETITION LENDERS"). The Pre-Petition Credit Agreement provided for a new $320 million secured credit facility which included (1) a $205 million revolving credit facility (the "REVOLVING CREDIT FACILITY"), with a sublimit for letters of credit having a face amount not to exceed $70 million in the aggregate, and (2) a $115 million term loan (the "TERM LOAN FACILITY," and together with the Revolving Credit Facility, the "PRE-PETITION CREDIT FACILITIES"). The lenders under the Pre-Petition 20 Credit Facilities were granted a first priority perfected security interest in substantially all of the Debtors' assets. Proceeds from the Pre-Petition Credit Facilities were used to satisfy the Company's obligations under its debtor in possession financing facility in the Previous Bankruptcy Cases, and to pay certain costs of the reorganization process. Additionally, the Pre-Petition Credit Facilities were available to satisfy the Company's ongoing working capital and capital expenditure requirements. (b) PRE-PETITION CREDIT FACILITY, SENIOR NOTES AND OTHER SECURED OBLIGATIONS As of the Petition Date, the Borrowers were indebted under the Pre-Petition Credit Facilities to the Pre-Petition Lenders comprised of 13 banks and financial institutions. The Term Loan Facility was scheduled to mature on June 30, 2006. The Revolving Credit Facility was scheduled to mature on June 30, 2005. As of the Petition Date, approximately $50 million and $99 million were outstanding under the Revolving Credit Facility and Term Credit Facility, respectively. As of the Petition Date, approximately $49 million of Letters of Credit (the "PRE-PETITION LETTERS OF CREDIT") were outstanding under the Revolving Credit Facility. In addition, the Debtors are also party to two interest rate swap agreements (the "HEDGE OBLIGATIONS") with certain Pre-Petition Lenders relating to the Pre-Petition Credit Agreement.(5) The Borrowers' obligations under the Pre-Petition Credit Facilities and the Hedge Obligations were secured by liens on substantially all of the Debtors' assets. In addition to the Company's secured debt under the Pre-Petition Credit Facilities, the Company has approximately $4.2 million of other secured debt, which includes mortgages on certain property owned by the Debtors. In connection with consummation of the Previous Plan, Penn Traffic issued $100 million of 11% Senior Notes (the "NOTES") due on June 29, 2009. The Notes are unsecured obligations of Penn Traffic, which bear interest payable semi-annually in cash at the rate of 11%. The Notes do not contain any mandatory redemption or sinking fund requirement provisions. The Notes were issued pursuant to the Previous Plan to holders of the Company's senior notes that were outstanding prior to the Previous Petition Date. Except as set forth above and with the exception of approximately $53 million in capital lease obligations, the Debtors have no additional borrowed indebtedness or debt securities. - -------------------------- (5) During April 2000, the Company entered into interest rate swap agreements, which expire in five years, that effectively convert $50 million of its variable rate borrowings into fixed rate obligations. Under the terms of these agreements, the Company makes payments at a weighted average fixed interest rate of 7.08% per annum and receives payments at variable interest rates based on the London InterBank Offered Rate. 21 (c) EQUITY As of April 25, 2003, Penn Traffic had 20,064,264 shares of Common Stock outstanding. The Company has also issued 1,000,000 Warrants, which are outstanding. Prior to the Petition Date, Penn Traffic's Common Stock and Warrants were quoted on the NASDAQ National Market. Shares of Common Stock were owned by approximately 2,567 stockholders and the Warrants were owned by approximately 180 warrant holders, respectively, of record as of February 1, 2003. On May 21, 2003, the Company received a notice from The NASDAQ Stock Market indicating that because the Company failed to provide NASDAQ with a copy of its Annual Report on Form 10-K for fiscal 2003, the Company's Common Stock and Warrants to purchase Common Stock would be delisted from the NASDAQ at the opening of business on May 30, 2003, unless the Company requested a hearing prior to 4:00 p.m. on May 28, 2003, in accordance with NASDAQ rules. The Company determined not to request a hearing and the Common Stock and Warrants to purchase Common Stock were delisted from the NASDAQ at the opening of business on May 30, 2003. The Company has not, since the Petition Date, filed any required periodic reports with the SEC. The Company is also authorized to issue up to 1,000,000 million shares of $.01 par value preferred stock. As of the Petition Date, no shares of preferred stock have been issued. B. EVENTS LEADING TO COMMENCEMENT OF THE CHAPTER 11 CASES 1. OVERVIEW The Debtors believe that their financial difficulties, and the events leading to their Chapter 11 Cases, are attributable to a number of factors. First, the dramatic downturn in the economy generally in the latter half of 2001 adversely impacted the Debtors' ability to build their revenue base and generate funds adequate to meet their debt servicing requirements. Second, the fairly recent entry of mega-retailers, such as Wal-Mart, into the supermarket industry has exerted significant pressure on the Debtors and other supermarkets to lower prices and hold down labor costs. The impact of wage pressures in the supermarket industry is particularly intense because the supermarket industry is one of the few segments of retailing that continues to rely heavily on a unionized workforce. Consequently, the impact of these entrants into the market, some of whom enjoy labor costs roughly 20 to 30 percent lower than those of unionized supermarkets, has been particularly harsh for smaller supermarket-chains such as the Debtors, which historically operate on thin profit margins and have unionized work forces. In response to the economic downturn and changing market conditions, the Debtors embarked on aggressive initiatives to rationalize their operations. They have been working diligently to reduce costs throughout their operations, while maintaining their quality and service goals. For example, one of the Debtors' major initiatives for 22 2002 was the reduction of inventory shrink in their perishable departments. In addition, the Debtors implemented a number of initiatives to reduce distribution costs, including warehouse consolidation and launching of a new logistics system to improve truck routing and trailer capacity utilization. The Debtors also pursued other cost reduction and containment programs. These include work simplification initiatives, the rollout of a labor scheduling system in all of the Debtors' stores and the use of electronic commerce to reduce the costs of certain products. 2. AMENDMENT TO THE CREDIT FACILITY Notwithstanding their efforts, during the third and fourth quarters of the fiscal year ended February 1, 2003 and the first quarter of the fiscal year ending January 31, 2004, the Company experienced declines in operating performance that would have resulted in defaults under the Pre-Petition Credit Facility effective on May 3, 2003 (the end of the first quarter of fiscal 2004) as a result of the Company's failure to comply with certain of the financial covenants in the Pre-Petition Credit Agreement. In order to avoid the occurrence of such defaults, on May 2, 2003 the Company entered into a Waiver and Forbearance Agreement (the "MAY WAIVER AGREEMENT") with the Pre-Petition Lenders that waived the Company's failure to comply with certain financial covenants in the Pre-Petition Credit Agreement through and including May 9, 2003. The May Waiver Agreement permitted the Company to borrow, repay and reborrow under the Pre-Petition Credit Agreement through and including May 9, 2003, subject to certain restrictions, including additional restrictions on borrowing availability under the Pre-Petition Credit Agreement. Because of the continuing negotiations with the Pre-Petition Lenders, the Company also announced on May 5, 2003 that it was necessary for it to make use of the extension period permitted by the federal securities laws with respect to the filing of the Company's Annual Report on Form 10-K for the fiscal year ending February 1, 2003 in order to finalize and update its audit report and related disclosures. The Company disclosed on May 5, 2003 that if the Company were to have filed the Annual Report on Form 10-K on May 2, 2003, it was likely that the audit opinion contained in the report would have raised concerns over the Company's ability to continue as a going concern. On May 12, 2003, the Company announced that it had entered into an amendment to its Pre-Petition Credit Agreement ("AMENDMENT NO. 5") with the Pre-Petition Lenders that replaced the May Waiver Agreement. Amendment No. 5 made most of the financial covenants in the Pre-Petition Credit Agreement less restrictive and, as a result of Amendment No. 5, the Company was in compliance with the financial covenants in the Pre-Petition Credit Agreement as of May 2, 2003 (the end of its first fiscal quarter) and was permitted to borrow, repay and reborrow under the Revolving Credit Facility of its Pre-Petition Credit Agreement. Amendment No. 5 also contains a provision that waives the Company's obligation to file its Annual Report on Form 10-K for fiscal 2003 until the earlier of (i) June 9, 2003 or (ii) the date the Company's independent auditor notified the Company that it will not issue its unqualified report on 23 the Company's consolidated financial statements to be included in the Annual Report on Form 10-K for fiscal year 2003. On May 12, 2003, the Company also announced that it continued to work with its independent auditor to finalize the audit of its consolidated financial statements for fiscal 2003 so that it could file its Annual Report on Form 10-K within the waiver period set forth in Amendment No. 5. Beginning in the week of May 12, 2003, certain of the Company's key trade creditors informed management that they would require the Company to pay for products in cash, in advance of the shipment of such products to the Company's stores, or on dramatically constrained credit terms. These constraints on the Company's trade credit resulted in liquidity shortfalls under the Company's existing financial arrangements. On May 20, 2003, the Company announced that the filing of its Annual Report on Form 10-K for fiscal 2003 with the SEC would be further delayed. The Company also announced that it was considering all of its strategic alternatives, including filing of a voluntary petition for reorganization under chapter 11 of the United States Code upon it being able to secure an appropriate debtor in possession financing arrangement ("DIP FINANCING"). C. THE CHAPTER 11 CASES On May 30, 2003 (the "PETITION DATE"), to preserve the enterprise value of the business and to secure DIP Financing that was expected to provide adequate liquidity to fund the Company's ongoing operations, the Board determined to file voluntary petitions for relief under chapter 11 of the Code for each of the Debtors. The Debtors believed that the remedial provisions of chapter 11 would enable them to restructure their operations around their core profitable stores, and to emerge as an economically viable and competitive force in the supermarket industry. 1. OVERVIEW OF THE DEBTORS' OPERATIONS IN CHAPTER 11 Since the Petition Date, the Cases have been pending, before the Honorable Adlai S. Hardin Jr., United States Bankruptcy Judge for the Southern District of New York. During this period, the Debtors have functioned as debtors-in-possession pursuant to Sections 1107 and 1108 of the Code and have continued to operate their business and mange their properties. The Bankruptcy Court has exercised supervisory powers over the operations of the Debtors with respect to the employment of attorneys, financial advisors and other professionals, and transactions out of the Debtors' ordinary course of business or otherwise requiring bankruptcy court approval under the Code. Generally, the Debtors have been paying undisputed obligations that have arisen subsequent to the Petition Date on a timely basis. Simultaneously with the filing of the petitions, the Debtors filed certain motions seeking orders from the Bankruptcy Court authorizing the Debtors to retain 24 professionals. Specifically, the Debtors filed motions for authorization to retain (i) Paul, Weiss, Rifkind, Wharton & Garrison LLP ("PAUL WEISS") as bankruptcy counsel, (ii) KZCS, LLC ("KZCS") as restructuring advisor, (iii) Peter J. Solomon Company ("PJSC") as financial advisor, and (iii) Donlin, Recano & Company, Inc., as claims and noticing agent (the "CLAIMS AGENT"). (a) STABILIZATION OF THE BUSINESS During the initial stages of the Chapter 11 Cases, the Debtors devoted substantial efforts to stabilizing their operations and restoring their relationship with employees, trade creditors and utilities that had been impacted by the commencement of the Chapter 11 Cases. (b) FILING AND FIRST DAY ORDERS On May 30, 2003, Penn Traffic and its subsidiaries filed their petitions under chapter 11 of the Code. On that date, and during the weeks immediately thereafter, the Bankruptcy Court approved certain orders designed to minimize the disruption of the Debtors' business operations and to facilitate their reorganization. Certain of the orders were entered on an interim basis; all such interim orders were entered as final relief at a later date. (i) CASE ADMINISTRATION ORDERS. These orders (i) authorized joint administration of the Chapter 11 Cases, (ii) established interim compensation procedures for professionals and (iii) granted an extension of time to file the Debtors' schedules. (ii) PAYMENTS ON ACCOUNT OF CERTAIN PRE-PETITION CLAIMS. The Bankruptcy Court authorized the payment of certain pre-petition (i) wages, compensation and employee benefits, (ii) obligations to customers, including obligations relating to the Debtors' return policy, gift certificates and coupon programs, (iii) certain claims owing to vendors of goods under the Perishable Agricultural Commodities Act and (iv) pre-petition sales, use, cigarette and tobacco taxes. (iii) BUSINESS OPERATIONS. The Bankruptcy Court authorized the Debtors to (i) continue satisfying pre-petition premium obligations under workers' compensation insurance policies and all other insurance policies, (ii) maintain existing bank accounts and business forms, (iii) continue their existing centralized cash management system on an interim basis, (iv) continue their current investment policy on an interim basis, and (v) provide adequate assurance to utility companies on an interim basis. (c) KZCS ENGAGEMENT AND AGREEMENT Pursuant to a Services Agreement, dated May 29, 2003, among the Debtors, Steven G. Panagos and KZCS, as amended (as so amended and as approved by final order of the Bankruptcy Court on September 26, 2003, the "KZCS AGREEMENT"), the 25 Debtors engaged (i) Mr. Panagos, a managing director of Kroll Zolfo Cooper LLC (the firm that had been engaged by the Debtors prior to the Petition Date to provide advisory services to the Debtors in connection with the Debtors' financial restructuring), to act as Penn Traffic's Chief Restructuring Officer and (ii) KZCS, to provide certain individuals (including Mr. Panagos) to work for the Debtors. The KZCS Agreement commenced on the Petition Date and continues on a month to month basis through the consummation of a chapter 11 plan of reorganization, unless sooner terminated pursuant to an order of the Bankruptcy Court. As compensation for the services provided by Mr. Panagos and KZCS, the KZCS Agreement provides for the payment by the Debtors of a monthly fee of $275,000.00, subject to adjustment based on a monthly statement of actual hourly charges and expenses relating to the prior month. In addition, the KZCS Agreement provides for the payment of a success fee to KZCS, based on the percentage of recoveries on allowed general unsecured creditor claims. Following discussions with the Creditors' Committee, KZCS has agreed to a success fee as follows: (i) $2.75 million in Cash payable upon entry of an approval order by the Bankruptcy Court; (ii) $1 million in Cash payable when the "aggregate unsecured creditor recovery" ("AUCR," as defined below) exceeds 25%; and (iii) $1.25 million in Cash payable when the AUCR exceeds 30%. AUCR means the 30 day average daily closing trading price of the New Penn Traffic Common Shares, MULTIPLIED BY the thirty day average of the number of New Penn Traffic Common Shares issued and outstanding, DIVIDED BY the 30 day average of the aggregate amount of Allowed Class 3 Claims. Such calculation will be performed after the Effective Date daily beginning on the 120th day after public trading of the New Penn Traffic Common Shares commences, and will continue through the 485th day thereafter. The KZCS Agreement also provides for the reimbursement to Mr. Panagos and KZCS of their reasonable out-of-pocket expenses, and full indemnification. Distributions to be made on account of the KZCS Success Fee are set forth on Plan Schedule 1.63. (d) PJSC ENGAGEMENT AND AGREEMENT Pursuant to a letter agreement, dated June 11, 2003, between the Debtors and PJSC (as approved by final order of the Bankruptcy Court on September 26, 2003, the "PJSC AGREEMENT"), the Debtors retained PJSC to act as its financial advisor in connection with its chapter 11 proceedings. Under the PJSC Agreement, PJSC agreed to assist the Debtors in assessing its operating and financial strategies; review and analyze its business plans; advise the Debtors in connection with possible transactions; advise the Debtors in restructuring its existing indebtedness; assist the Debtors in formulating a plan of reorganization, including valuing the Debtors on a going concern basis in connection therewith and assisting in the plan confirmation process; and rendering such other financial advisory and investment banking services as may be agreed upon by PJSC and the Debtors. The PJSC Agreement commenced at the time it was approved by the Bankruptcy Court and continues through the date the Debtors' plan of reorganization is confirmed. As compensation for the services provided by PJSC, the PJSC Agreement provides for a monthly advisory fee of $100,000.00, a Transaction Fee and a Reorganization Fee. The monthly fee is credited against any Transaction Fee or Reorganization Fee paid by the Debtors. The Transaction Fee is equal to a percentage of the aggregate consideration payable in connection with any Transaction (defined as one 26 or more transactions whereby, directly or indirectly, an ownership interest in the Debtors or in all or any portion of its assets is transferred for consideration, other than the sale of individual stores or "going out of business sales" of inventory and other assets with respect to which PJSC does not advise the Debtors). No Transaction Fee is due and payable under the PJSC Agreement. The Reorganization Fee under the PJSC Agreement is $2,250,000.00, subject to compliance with Section 6.4.(A) of the Plan. The PJSC Agreement also provides for the reimbursement to PJSC of its reasonable out-of-pocket expenses, and full indemnification. Distributions to be made on account of the PJSC Reorganization Fee are set forth on Plan Schedule 1.79. 2. THE DIP FACILITY To provide the Debtors with the liquidity necessary to continue operations and to maintain normal vendor relations, Penn Traffic, Big M, Dairy Dell and Penny Curtiss (collectively, the "BORROWERS") entered into a $270 million debtor-in-possession financing facility (the "DIP FACILITY") pursuant to that certain Loan and Security Agreement (as amended, the "DIP CREDIT AGREEMENT"), dated as of August 7, 2003, among the Borrowers, the lenders identified therein (the "DIP LENDERS"), including Fleet Capital Corporation ("FLEET"), and Fleet, as administrative agent (the "AGENT"). On May 30, 2003, the Bankruptcy Court entered an interim order authorizing the Borrowers to borrow up to $70 million under the DIP Credit Facility on an interim bases, and on July 31, 2003, the Bankruptcy Court entered a final order (the "DIP ORDER") approving the DIP Credit Facility on a final basis in its entirety. Pursuant to the DIP Order and the DIP Credit Facility, the Borrowers were authorized to borrow up to $270 million in revolving loans, with a sublimit for letters of credit in the amount of $70 million (the "DIP OBLIGATIONS"). Availability under the DIP Credit Facility for each Borrower is calculated by reference to a specified percentage of certain receivables, inventory, equipment and real property interests of such Borrower, less certain agreed-to reserves, all as set forth in a borrowing base certificate delivered to the Agent on a periodic basis. Upon entry of the DIP Order and in accordance with the terms thereof, the Borrowers utilized a portion of the DIP Facility to repay the Borrowers certain obligations under the Pre-Petition Loan Documents (as defined in the DIP Order), including approximately $50 million of pre-petition secured revolving loans and $99 million of pre-petition term loans. In addition, all letters of credit issued and outstanding under the Pre-Petition Loan Documents and certain pre-petition interest rate hedging obligations were deemed to be outstanding under the DIP Facility. The balance of amounts available under the DIP Credit Facility have been utilized by the Borrowers to satisfy on-going working capital needs. The original maturity date of the DIP Facility was February 28, 2004, but that date was extended by action of the super-majority lenders under the DIP Facility until March 31, 2004 and then to February 28, 2005 pursuant to Amendment No. 2 to the DIP Credit Facility (the "AMENDMENT NO. 2") dated March 31, 2004. The Debtors currently are in negotiations with the DIP Lenders with respect to a further extension of the maturity of the DIP Facility through the Effective Date of the Plan. Pursuant to Amendment No. 2, the Borrowers and the DIP Lenders agreed to, among other things, 27 reduce commitment levels under the DIP Facility to $150 million in the aggregate, with a sublimit for letters of credit not to exceed $55 million. In light of store closings and other substantial asset sales that had occurred to date in these cases, the Borrowers believed that a reduction in the size of the DIP Facility was warranted and appropriate. The Borrowers further believe that the DIP Facility, as amended, will provide the Borrowers with sufficient liquidity to fund their operations for the remainder of the Cases. As of December 25, 2004, outstanding indebtedness under the DIP Credit Facility consisted of approximately $32 million in revolving loans and approximately $49 million in letters of credit. The Borrowers' obligations to the Agent and the DIP Lenders under the DIP Credit Facility are secured by a first priority security interest in all currently owned or hereafter acquired property and assets of the Debtors, including, without limitation, all inventory, accounts receivable, general intangibles, equipment, notes, documents, chattel paper, cash, investment property and interests in real property (whether owned or leased), and the proceeds of all causes of action (other than avoidance actions), subject only to certain permitted liens and a professional fee carve-out. In addition, the DIP Obligations have been accorded super-priority administrative expense status under Section 364(c)(1) of the Bankruptcy Code with priority over all other administrative claims, subject only to the professional fee carve-out. 3. EMPLOYEES (a) PAYMENT OF PRE-PETITION AMOUNTS DUE EMPLOYEES. As of the Petition Date, the Debtors collectively employed approximately 16,347 full and part-time employees. To minimize the personal hardship those employees would have otherwise suffered if pre-petition employee obligations were not paid when due, and to maintain its employees' morale, the Debtors filed a motion seeking authorization to pay certain pre-petition claims for employees' wages, salaries, commissions, compensation, health benefits, retirement benefits, contributions to various employee benefits plans, federal and state withholding taxes, payroll taxes, reimbursable expenses, and all other employee benefits which the Debtors otherwise pay in the ordinary course of their businesses. On May 30, 2003, the Court entered an order authorizing the above-mentioned payments. (b) KEY EMPLOYEE RETENTION PROGRAM. On October 24, 2003, the Court entered an order (the "KERP ORDER") approving a Key Employee Retention, Incentive and Severance Plan ("KERP"). The Debtors sought to implement the KERP with the goal of retaining and incentivizing the Company's management and other key employees required to stabilize and continue the Company's operations, implement a reorganization plan, and preserve and enhance the value of the Company during the pendency of the cases. The KERP is comprised of retention, incentive and severance components. First, the retention bonuses are designed to encourage key employees to remain in the Debtors' employ through the pendency of the chapter 11 cases, or for so long as the Debtors require their services, and to respond to market competitiveness and the Company's current business economics. Second, the incentive component of the KERP is designed to induce and reward key employees for the successful achievement of 28 Company profit goals during the reorganization process. Third, the severance protection included in the KERP provides salary continuance to terminated employees in the event of involuntary termination due to the elimination of their position. Finally, the KERP includes a discretionary pool to be utilized in special retention circumstances at the discretion and direction of the Company's Chief Executive Officer and Vice President of Human Resources. In sum, the KERP is designed to minimize management and other key employee turnover, as well as to enhance employee morale, job commitment and performance. (c) FISCAL YEAR 2005 INCENTIVE PLAN. On August 31, 2004, the Court entered an order approving a management performance incentive plan (the "2005 INCENTIVE PLAN") with the goal of maintaining employee morale and incentivizing employees to achieve or exceed the Company's 2005 fiscal year business plan. The 2005 Incentive Plan is designed to pay up to approximately $3.1 million for incentive compensation if the Company meets certain EBITDA performance goals for fiscal year 2005. Payments under the 2005 Incentive Plan will be made after the completion of the audit of fiscal year 2005 results. 4. CLAIMS BAR DATE AND LAST DATE TO FILE PROOFS OF CLAIMS On July 22, 2003, the Debtors filed a motion seeking an order (the "BAR DATE ORDER") from the Court requiring any person or entity holding or asserting a Claim against the Debtors to file a written proof of claim with the Clerk of the Court, United States Bankruptcy Court for the Southern District of New York, P.O. Box 5149 Bowling Green Station, New York, New York 10274, on or before 5:00 p.m. (EST) on October 15, 2003 (the "BAR DATE"). Such motion requested that any person or entity (other than, among others, any person having an administrative claim allowable under Section 507(a) of the Code, any person or entity whose claim is listed in the Debtors' schedules, is not listed as "disputed," "contingent," or "unliquidated," and who agrees with the classification and amount set forth therein, any person or entity that has previously filed a proof of claim with the Clerk of the United States Bankruptcy Court for the Southern District of New York and any holder of an equity security or common stock interest in Penn Traffic) which fails to timely file a proof of claim will be forever barred, estopped and enjoined from voting on, or receiving a distribution under, the Plan and will be forever barred, estopped and enjoined from asserting a Claim against the Debtors, their estates, the Reorganized Debtors, and any of their successors or assigns. On August 1, 2003, the Court entered the Bar Date Order and established October 15, 2003 as the Bar Date. 5. RECLAMATION PROCEDURES ORDER On July 15, 2003, the Bankruptcy Court entered an order (the "RECLAMATION PROCEDURES ORDER") which, among other things, established procedures for the treatment and reconciliation of reclamation claims. Consistent with the Reclamation Procedures Order, the Debtors filed on September 2, 2003 an interim report scheduling those reclamation claims they deemed to be valid. On October 7, 2003, the Debtors filed a final reclamation report with the court scheduling claims they deemed to be valid. 29 Finally pursuant to the Reclamation Procedures Order, as modified by the Trade Lien Program (defined below), as of December 8, 2004, the Debtors have paid approximately $13,033,497.68 in satisfaction of reclamation claims and estimate making further payments of $4,000,000.00 - $5,000,000.00 through the Initial Distribution Date on account of reclamation claims. 6. TRADE LIEN PROGRAM As one of the leading food retailers in the eastern United States, the Debtors are dependent upon the receipt of inventory and other products from various trade vendors to operate their businesses. However, in the first several months of these Chapter 11 Cases, a vast majority of trade vendors refused to deliver their products to the Debtors on normal and customary trade terms. By insisting on cash-in-advance, cash-on-delivery or other stringent trade terms, the trade vendors put an enormous strain on the Debtors' cash flow. To alleviate this problem, the Debtors, in consultation with the Creditors' Committee, certain trade vendors and the DIP Agent for the DIP Lenders developed a program that would incentivize trade vendors to provide inventory to the Debtors on normal and customary trade terms through implementation of a trade lien program (the "TRADE LIEN PROGRAM"), which was approved by an order the Bankruptcy Court entered on October 23, 2003 (the "TRADE LIEN PROGRAM ORDER"). Under the Trade Lien Program, the Debtors granted a junior lien on all of their respective assets already subject to the lien in favor of the DIP Agent under the DIP Credit Agreement to secure amounts owing to eligible trade vendors for subject inventory shipped to the Debtors on minimum trade terms (as described below) during the pendency of these Chapter 11 Cases. As a further inducement, the Debtors also agreed to waive any preference claims the Debtors may have under Section 547(b) of the Code against any eligible vendor which arises out of payments made to such vendor on account of goods supplied prior to the Petition Date. The Trade Lien Program Order also amended the Reclamation Claims Order to provide for a payment schedule for reconciled reclamation claims held by vendors participating in the Trade Lien Program. As of December 8, 2004, 58 vendors have participated in the Trade Lien Program currently extending approximately $15,300,000.00 of credit to the Debtors. Pursuant to Section 2.5. of the Plan, unless otherwise agreed by the holder of an Allowed Trade Lien Claim (in which event such other agreement will govern), each holder of an Allowed Trade Lien Claim will be paid in full in Cash on the date on which, in the ordinary course of business, such Allowed Trade Lien Claim becomes due and owing. On the Effective Date, the lien granted by the Trade Lien Program will be released. In conjunction with obtaining an Exit Financing Facility to fund the Reorganized Debtors' operations upon emergence from chapter 11, the Debtors intend to institute a trade lien program to provide incentives to trade vendors to offer trade credit to the Reorganized Debtors. The terms of such program will be set forth on Plan Schedule 5.17, which will be filed ten days prior to the Voting Deadline. If the Reorganized Debtors implement a Post-Effective Date Trade Lien Program, then each holder of an Allowed Trade Lien Claim will also share PARI PASSU in any Post-Effective Date Trade Lien on the terms and conditions described in Section 5.17. of the Plan. Each 30 entity acquiring property or securities under the Plan, and any creditor and/or equity security holder of the Debtors or Reorganized Debtors, will be deemed to contractually subordinate any present or future claim, right, or other interest it may have in and to any proceeds received from the disposition, release or liquidation of any real properties subject to any Post-Effective Date Trade Lien, to claims of the parties secured by any Post-Effective Date Trade Lien; PROVIDED, HOWEVER, that in no case will the lenders under the Exit Financing Facility be deemed subordinated in this regard. Such contractual subordination will terminate upon termination or expiration of any Post-Effective Date Trade Lien. 7. PLAN EXCLUSIVITY Pursuant to Section 1121 of the Code, the Debtors are afforded periods of 120 and 180 days, respectively, from the Petition Date during which period they have the exclusive right to file, and solicit acceptances of, a plan or plans of reorganization. The Debtors have obtained approval of six separate extensions of their exclusive periods, the most recent extensions being to and including March 25, 2005 and May 25, 2005, respectively. The Plan was filed prior to the expiration of the Debtors' exclusive period to file a plan of reorganization. 8. THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS On June 9, 2003 the United States Trustee appointed an Official Committee of Unsecured Creditors (the "CREDITORS' COMMITTEE") in the Chapter 11 Cases. The Creditors' Committee currently consists of: The Procter & Gamble Distributing Company, American Greetings Corporation, Kraft Foods, Unilever, Cardinal Health, Inc., PepsiCo and The Bank of New York, as indenture trustee. In addition, the following serve as EX OFFICIO members of the Creditors' Committee: United Food and Commercial Workers Union; Nestle USA and the Pension Benefit Guaranty Corporation. The Creditors' Committee has retained Otterbourg, Steindler, Houston & Rosen, P.C. as its counsel, and Ernst & Young Corporate Finance LLC as its financial advisor. On November 9, 2004, FTI Consulting replaced Ernst & Young Corporate Finance LLC as financial advisors to the Creditors' Committee. 31 9. MANAGEMENT On the Petition Date, the Debtors hired Stephen G. Panagos, a Managing Director of Kroll Zolfo Cooper LLC ("KZC"), as Chief Restructuring Officer, to provide advisory services in connection with the Debtors' financial restructuring. In addition, the Debtors retained KZC Services LLC ("KZCS"), an affiliate of KZC, to assist Mr. Panagos with the Debtors' financial restructuring. Mr. William Murphy of KZCS has served as the Debtors' Interim Chief Financial Officer during the Chapter 11 Cases. In August 2003, Joseph V. Fisher, the Debtors' incumbent Chief Executive Officer, resigned for personal reasons. As a result, Mr. Panagos, the Debtors' current Chief Restructuring Officer, was named the Debtors' Interim Chief Executive Officer. In addition, in August 2003, Penn Traffic entered into an employment agreement with James A. Demme to serve as Chairman of the Board of Directors of Penn Traffic (the "DEMME Agreement"). The Demme Agreement provides, among other things, for a salary of $100,000.00 per month for the first five months and $30,000.00 per month thereafter. As set forth on Plan Schedule 1.35, in addition, upon confirmation of any plan of reorganization, Mr. Demme will receive a bonus ("SUCCESS BONUS") based on the percentage recoveries, in any form on allowed general unsecured claims, including the 11% senior notes and all other general unsecured claims, as follows: (x) for recoveries up to 10%, the Success Bonus will be $250,000.00; and (y) for each additional 1% of recoveries above 10%, the Success Bonus will be increased by an additional $20,000.00. In or about October 2003, Penn Traffic's Board of Directors (the "BOARD") determined that it was in the best interests of the Debtors, their estates and creditors, that the Debtors institute a search for a permanent President and Chief Executive Officer. After an intensive search process spanning some five months and involving interviews of numerous candidates, Penn Traffic appointed Robert Chapman as the President and Chief Executive Officer of Penn Traffic. Mr. Chapman has spent his entire professional career spanning some 36 years at Penn Traffic, working in various positions of increasing authority and responsibility. Most recently, Mr. Chapman has served as Vice President of Penn Traffic's wholesale/franchise business since 1999. He is an experienced and successful supermarket operator, with a strong track record of improving operations and increasing sales. The Court approved Mr. Chapman's retention by order dated April 27, 2004. Following Mr. Chapman's appointment as Penn Traffic's President and Chief Executive Officer, Mr. Panagos has continued as Chief Restructuring Officer. On or about January 4, 2005, Penn Traffic appointed Robert Dimond as Executive Vice President and Chief Financial Officer. Mr. Dimond has spent his entire 18 year career in the field of accounting and financial management. The majority of Mr. Dimond's experience is in the food retail industry, mostly serving as chief financial officer to a leading food retail and distribution company. The Bankruptcy Court approved Mr. Dimond's engagement by order dated January 18, 2005. Following Mr. Dimond's appointment as Penn Traffic's Chief Financial Officer, Mr. Murphy, who 32 has served as Interim Chief Financial Officer during the Cases, will continue as Associate Director of Restructuring of Penn Traffic. 10. RESTRUCTURING OF THE DEBTORS' BUSINESSES (a) STORE CLOSING SALES AND DISPOSITION OF THE BIG BEAR CHAIN The Debtors determined in October 2003 that it was in the best interests of their estates and creditors to (i) conduct store closing sales at approximately 40 unprofitable supermarkets in their Big Bear, P&C, Bi-Lo and Quality chains (the "INITIAL CLOSING STORES"), and (ii) conduct a competitive bidding process for the sale of the remaining Big Bear supermarket chain, consisting of approximately 55 supermarkets in Ohio and West Virginia with their attendant leases, inventory and furniture, fixtures and equipment ("FF&E"), along with two warehouses (collectively, the "BIG BEAR ASSETS"). As a result, the Debtors retained a store closing agent in November 2003 to assist in inventory liquidations at the Initial Closing Stores, which have since concluded. In addition, on November 10, 2003, the Debtors filed a motion (the "KROGER SALE MOTION") with the Bankruptcy Court for entry of an order (i) authorizing the sale of certain of the Big Bear Assets pursuant to the terms of an asset purchase agreement, subject to higher and better offers, to be solicited at an auction, (ii) approving the procedures for an auction, (iii) authorizing the assumption and assignment of certain executory contracts and unexpired leases, and (iv) scheduling an auction and a hearing date relating thereto. More specifically, in the Kroger Sale Motion the Debtors requested, INTER ALIA, authorization to sell to Kroger Co. ("KROGER") 11 of the Debtors' Big Bear supermarkets in central Ohio, exclusive of non-prescription drug inventory, for $20 million plus the purchase price of the prescription drug inventory pursuant to the terms of that certain Asset Sale Agreement between Penn Traffic and Kroger dated November 10, 2003 (the "KROGER CONTRACT"), subject to higher and better offers to be solicited at an auction. The Kroger Sale Motion also contemplated that, at the auction (the "BIG BEAR AUCTION"), the Debtors would consider (i) higher and better bids for the assets covered by the Kroger Contract, and (ii) bids for other Big Bear Assets, including Big Bear stores on an operating basis, store leases or fee interests, and inventory and furniture, fixtures and equipment in the stores and/or Big Bear's two warehouses. The bidding procedures governing the Big Bear Auction were approved by the Bankruptcy Court on November 20, 2003 and the Big Bear Auction was held on December 3, 2003 and December 9, 2003. As a result of the Big Bear Auction, the Debtors consummated sales of seven Big Bear supermarkets to the Giant Eagle Company for approximately $47 million (the "GIANT EAGLE SALE"). In addition, the Debtors also disposed of an additional eight Big Bear supermarkets to purchasers identified at the Big Bear Auction in the weeks following the auction (the "SUBSEQUENT BIG BEAR SALES"). A hearing to consider approval of the sale of certain of the Big Bear assets to the winning bidders at the Big Bear Auction was held on December 11, 2003 with such sales approved by the Bankruptcy Court that day. 33 In addition to the Giant Eagle Sale and the Subsequent Big Bear Sales, the Debtors have been disposing of the remaining Big Bear Assets through lease rejections, lease termination agreements and/or the sale of the furniture, fixtures and equipment located in the Big Bear supermarkets. As of June 1, 2004, the Debtors have realized $145 million in proceeds from the disposition of Big Bear Assets. (b) SALE OF OTHER ASSETS Penn Traffic presently owns 21 and leases 88 of the supermarkets and two stand-alone pharmacies that it operates. The leased supermarkets are held under leases expiring from 2004 to 2027, excluding option periods. In addition, Penn Traffic owns or leases 35 supermarket locations which are leased or subleased to independent operators. As of the Petition Date, Penn Traffic owned five shopping centers that contain company-owned or licensed supermarkets and owned or leased distribution centers in Syracuse and Jamestown, New York; Columbus, Ohio; and DuBois, Pennsylvania; and a bakery manufacturing plant in Syracuse, New York. Penn Traffic owns or leases a fleet of trucks and trailers, fixtures and equipment utilized in its business and certain miscellaneous real estate. Since the Petition Date, Penn Traffic has been actively marketing some of its non-core real property assets and has disposed of a number of them, including: (6) o A 6,650 square foot, retail building situated on 3.3 acres of land in Dunkirk, New York to Mr. Geoff Jenkins for $20,000.00. o A vacant, 30,400 square foot, retail building situated on 6.4 acres of land in Seneca, Pennsylvania to The Bias Group Enterprises, LLC for $465,000.00. o A vacant, 103,117 square foot, retail building situated on 12.5 acres of land in Ceredo, West Virginia to Business Service Realty Co. for $1,361,625.33. o A 131,218 square foot, multi-tenant retail building situated on 9.7 acres of land in Huntington, West Virginia to Pallotine Health Services, Inc. for $1,625,000.00. - --------------------- (6) In addition, Penn Traffic entered into an agreement for the sale of a 215,747 square foot warehouse facility located on approximately 20 acres of land in Columbus, Ohio to JRM Equities, Inc. for $4,000,000.00 (the "Warehouse Sale"). On or about May 26, 2004, the Bankruptcy Court entered an order approving the Warehouse Sale, but closing of the transaction was delayed due to pending zoning and permitting issues. In January 2005, JRM Equities, Inc. terminated the agreement for the Warehouse Sale pursuant to its terms. Penn Traffic currently is re-marketing the Ohio warehouse for sale. 34 o A vacant, 134,761 square foot, multi-tenant retail building located in a shopping center and situated on 15.2 acres of land in South Zanesville, Ohio to Eden Group, Ltd. for $1,920,000.00. o 4.1 acres of vacant land located in Utica, New York to D&C Enterprises for $405,000.00. o An empty 28,840 square foot building situated on 5.68 acres of otherwise vacant land in Wilkes-Barre, Pennsylvania to Delaware Land Company, Inc. for $750,000.00. o A 161,456 square foot office building located on 2.1 acres of land in Johnstown, Pennsylvania to Newfield Properties, LLC for $7,750,000.00. o A 4,326 square foot retail supermarket situated on .10 acres of land in Sherman, New York to Mack's Hometown Market LLC for $130,000.00. o A 9,680 square foot retail supermarket situated on .75 acres of land in Watsontown, Pennsylvania to Lingle's Real Estate, LLC for $300,001.00. o 21.66 acres of vacant land located in Watertown, New York in which Penn Traffic owned a one-third interest to Vision Development, Inc. for $300,000.00. o a 1,248 square foot vacant wood frame house situated on .5 acres of otherwise vacant land in Auburn, New York to Horn Companies LLC for $125,000.00. (c) PETER'S TRANSACTION. Penn Traffic's "P&C" supermarket chain currently is comprised of 59 stores located throughout upstate and central New York, Vermont, New Hampshire and Northern Pennsylvania. Penn Traffic has been exploring the possibility of expanding its operations in the Syracuse area with a view to maximizing the utilization of its existing marketing, distribution and district management infrastructures for its P&C stores through the acquisition of existing third-party supermarket operations. Prior to the Petition Date, Penn Traffic was involved in negotiations with Peter's Groceries Inc. regarding the purchase of its two Syracuse-based supermarkets. Penn Traffic is a wholesaler of groceries to Peter's Groceries, Inc. ("PETER'S GROCERIES"). On February 6, 2003, Peter's Groceries filed for chapter 11 protection. On October 29, 2004, Penn Traffic entered into a purchase and sale agreement (the "ASSET PURCHASE AGREEMENT") with Peter's Groceries, subject to Bankruptcy Court approval in the parties' respective chapter 11 cases, wherein Peter's 35 Groceries agreed to sell to Penn Traffic, all of the inventory and supplies, machinery, equipment, furniture, fixtures, customer files, prepaid expenses and warranties located at or associated with Peter's Shop City Store and the Skytop Plaza Store, along with Peter's Groceries' rights as lessee under the lease for the Shop City Store due to expire on April 30, 2018 and the Skytop Plaza Store due to expire on April 30, 2009 (collectively, all of the foregoing assets, the "ASSETS") for an approximate net purchase price of $820,000.00 (the "PETER'S TRANSACTION").(7) The Peter's Transaction was approved by the Bankruptcy Court on December 9, 2004 and the closing occurred on December 20, 2004. After capital expenditures are made, the Skytop Plaza Store and the Shop City Store are expected to contribute substantially to the Company's EBITDA. 11. ASSUMPTION AND REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES (a) GENERALLY. As of the Petition Date, the Debtors were parties to approximately 340 unexpired nonresidential real property leases of various types (the "LEASES"). The vast majority of the Leases relate to the operation of the Debtors' supermarkets, which numbered approximately 211 as of May 30, 2003. The Debtors also lease and/or sublet to third parties (i) certain franchisee wholesale facilities, (ii) certain vacant space or closed retail store locations, (iii) tenant space in shopping centers, (iv) office space, (v) distribution facilities, and (vi) warehouse and storage facilities. To date, the Debtors have made substantial progress in evaluating whether their leases are assets of their estates that warrant assumption, or whether they are liabilities that should be rejected. Significantly, the Debtors already have made decisions to reject many of their Leases. For example, on the first day of these cases, the Debtors sought, and the Court subsequently approved, the rejection of nine retail store leases. In addition, the Debtors also have filed four subsequent motions to reject ten additional leases of real property and have rejected or terminated approximately 67 additional number of Leases pursuant to notice procedure approved by the Bankruptcy Court in connection with the Initial Closing Stores and the Big Bear Stores. Moreover, the Debtors have engaged two real estate consulting firms, Keen Realty, LLC ("KEEN") and a joint venture between KRC Property Management I, Inc. and Jubilee Limited Partnership (collectively, "KRC"), to assist them in, among other things, (i) analyzing and evaluating the value or liability associated with respect to certain properties, (ii) marketing and aiding in the disposition of certain leased and fee owned properties and (iii) using their best efforts to renegotiate the terms of certain leasehold properties designated for renegotiation by the Debtors. - ----------------------- (7) The net purchase price was $820,000.00 consisting of: (i) a credit of approximately $550,000.00 against Penn Traffic's secured claim against Peter's Groceries on account of groceries sold by Penn Traffic to Peter's Groceries, plus (ii) $220,000.00 in cash. In addition to the foregoing, Penn Traffic paid $50,000.00 for certain costs incurred in the Peter's Groceries' chapter 11 case relating to the Peter's Transaction. 36 The Debtors are reviewing their remaining leases and will decide whether to reject any other leases. The Debtors, in conjunction with their attorneys and financial advisors will also review the Debtors' executory contracts to determine which, if any, of such contracts should be assumed or rejected. The Debtors will make any appropriate motions with respect to assumed or rejected leases and existing contracts within the time period established by the Code or such other time as set by the Bankruptcy Court. (b) FAYETTEVILLE LITIGATION. On November 9, 2004, Penn Traffic filed a motion to reject that certain Project Agreement dated May 1, 2001 (the "INITIAL PROJECT AGREEMENT"), as amended by that certain Modification No. 1 dated November 12, 2001 (the "MODIFICATION" and, together with the Initial Project Agreement, the "PROJECT AGREEMENT," between Penn Traffic and COR Route 5 Company, LLC ("COR") (the "FAYETTEVILLE REJECTION MOTION"). The Project Agreement contemplates the construction, operation and sale-leaseback of a supermarket (the "FAYETTEVILLE PROPERTY") in an upscale strip mall located in Fayetteville, New York in three stages: (i) the assembly of real estate parcels suitable to locate a supermarket in the Fayetteville Mall; (ii) the construction of a supermarket by COR and paid for by Penn Traffic and (iii) following completion of the supermarket and COR obtaining financing, the purchase of the store by COR from Penn Traffic and leaseback of the supermarket by Penn Traffic for 20 years, plus certain option periods. Prior to the Petition Date, the parties completed the first two stages of the transaction, but never consummated the sale-leaseback transaction. On November 18, 2004, COR filed an objection to the Fayetteville Rejection Motion seeking to compel the Debtors to perform the Project Agreement, including transfer of the Fayetteville Property to COR and lease-back to Penn Traffic. The Fayetteville Rejection Motion is pending before the Bankruptcy Court. (c) EFFECT OF PLAN ON CERTAIN INSURANCE POLICES; RISKS OF NO INSURANCE COVERAGE AND/OR DRAW UPON COLLATERAL. The Debtors anticipate that certain Claims will be satisfied in whole or in part from available insurance coverage. ACE American Insurance Company and Pacific Employers Insurance Company (and possibly other ACE USA-related companies) (collectively, the "ACE USA COMPANIES") have issued certain insurance policies to one or more of the Debtors (collectively, the "ACE USA POLICIES") which may provide coverage for part or all of certain pre-petition and/or post-petition automobile liability, workers' compensation and general liability Claims against the Debtors. In connection with the ACE USA Policies, the ACE USA Companies and certain of the Debtors have also entered into various related agreements (together with the ACE USA Policies, collectively, the "ACE USA AGREEMENTS"). The ACE USA Agreements are executory contracts pursuant to Section 365 of the Bankruptcy Code. Pursuant to a consent order approved by this Court on January 22, 2004, the ACE USA Agreements were assumed by the Debtors as executory contracts under Section 365 of the Bankruptcy Code. 37 Under the ACE USA Agreements, the ACE USA Companies have certain rights including, but not limited to, the right (i) to control the defense, investigation and/or settlement of certain Disputed Claims including, without limitation, those Disputed Claims for which liability may be determined by estimation, (ii) to require the Debtors and/or the Reorganized Debtors to cooperate in the defense and investigation of Disputed Claims, (iii) to require the Debtors' and/or the Reorganized Debtors' compliance with all the terms and conditions of the ACE USA Agreements, (iv) to assert certain subrogation rights available to the ACE USA Companies under the ACE USA Agreements, (v) to assert any claims for setoff, contribution and/or recoupment, (vi) to deny coverage for certain Claims based upon the attempted assignment of the ACE USA Agreements without the ACE USA Companies' express consent, (vii) to require payment of any deductibles and/or self-insured retentions with respect to otherwise insured Claims, and (viii) to enforce performance of all the Debtors' and/or the Reorganized Debtors' other continuing contractual obligations under the ACE USA Agreements. The Debtors and the Reorganized Debtors have certain rights and obligations under the ACE USA Agreements, as more fully set forth therein. Although the Debtors have assumed the ACE USA Agreements, the Plan permits the Debtors to reject any and all executory contracts, including the previously assumed ACE USA Agreements. The Debtors have not yet indicated whether they intend to reject any of the ACE USA Agreements or any other insurance policies that may provide coverage for Claims. The rejection of any or all of the executory ACE USA Agreements may result in a loss of coverage otherwise available to pay certain pre-petition and/or post-petition automobile liability, workers' compensation and/or general liability Claims against Debtors. Any loss of coverage for post-petition Claims will increase the amount of Administrative Claims against the Debtors' estates. Moreover, the subsequent rejection of the assumed executory ACE USA Agreements will constitute a breach of the agreements that may result in the ACE USA Companies holding one or more Administrative Claims for damages resulting from such breach and/or a draw upon certain collateral that the Debtors provided to the ACE USA Companies. Any such Administrative Claims, like all administrative claims, must be paid in full on the Effective Date of any confirmed Chapter 11 plan in the Cases. If the Debtors reject the ACE USA Agreements and the Plan is not amended, the ACE USA Companies believe that the injunction contained in the Plan and the failure of the Plan to otherwise require Debtors and/or Reorganized Debtors to satisfy all of their continuing contractual obligations under the assumed ACE USA Agreements may void any otherwise available insurance coverage under the ACE USA Agreements. As such, holders of Claims that may otherwise be covered under the ACE USA Agreements may not be able to receive any insurance proceeds in full or partial satisfaction of their Claims. The ACE USA Companies have reserved all of their rights, claims and defenses under the ACE USA Agreements, including, without limitation, those mentioned above, as well as the right to object to the confirmation of the Plan and the right to seek a declaratory ruling asserting that the improper treatment of the ACE USA 38 Agreements under the Plan relieves them of any further obligation to provide coverage thereunder. 12. GOVERNMENT INVESTIGATIONS On August 8, 2002, Penn Traffic announced that it would restate financial results after discovering that an employee of its Penny Curtiss bakery manufacturing subsidiary facility made false accounting entries which primarily involved the overstatement of inventory. When Penn Traffic discovered the overstatement, the Company immediately informed the chairperson of the Board of Directors' Audit Committee and began an internal review of the Penny Curtiss baking operation in Syracuse, New York. Based on the preliminary findings of this internal review, the Audit Committee began an independent investigation and engaged Paul, Weiss, Rifkind, Wharton & Garrison LLP as independent legal counsel, which in turn engaged KPMG LLP to assist in this ongoing investigation. The Company also said it would cooperate with the appropriate authorities on any investigation. On September 18, 2002, the Company announced restated financial results and reported that the total cumulative after-tax effect of the misstatements over the three and one-quarter year period ended May 4, 2002 was $7.3 million. The aggregate effect on EBITDA during the same three and one-quarter year period was $11 million. The Company has cooperated with government authorities, producing documents and making its employees available for interviews and testimony regarding their ongoing investigations of the Company and its accounting practices. The Company believes the investigations are currently focused on gathering information involving industry-wide accounting practices. The Company continues to fully cooperate with the governmental authorities regarding their investigations. 13. DEVELOPMENT OF BUSINESS PLAN Since the Petition Date, the Debtors have taken several key steps towards a successful and consensual resolution of these chapter 11 cases. In particular, the Debtors have (i) obtained and maintained adequate liquidity to fund their operations going forward, (ii) augmented the operational and restructuring capabilities of senior management, (iii) identified and implemented significant cost-cutting measures, and (iv) substantially completed significant asset sales. In addition, the Debtors have spent many months refining their comprehensive business plan that has served as the basis for formulating the Debtors' overall restructuring plan. Attendant to the business plan process, the Debtors retained PJSC early in these cases to explore and, if appropriate, pursue the sale of separate business units, or the entire Company. Additionally, the Debtors have retained Keen Realty and KRC Property Management to assist in evaluating and, if appropriate, pursuing the sale of the Debtors' substantial leasehold and other real property interests. 39 Based upon the business plan review and analysis, the Debtors determined in October 2003 that it was in the best interests of their estates and creditors to (i) conduct store closing sales at approximately 37 unprofitable supermarkets in their Big Bear, P&C, Bi-Lo and Quality chains (the "INITIAL CLOSING STORES"), and (ii) conduct a competitive bidding process for the sale of the remaining Big Bear supermarket chain, consisting of approximately 55 supermarkets with their attendant leases, inventory and furniture, fixtures and equipment, along with two warehouses (collectively, the "BIG BEAR ASSETS"). As a result, the Debtors retained a store closing agent in November 2003 to assist in inventory liquidations at the Initial Closing Stores. Additionally, in December 2003, the Debtors conducted a complex auction process for the Big Bear Assets, resulting in the immediate sale of a portion of the Big Bear Assets and the eventual orderly liquidation of the remainder of the Big Bear chain. To assist in this process, the Debtors retained (i) a store closing agent to assist in inventory liquidations at the remaining Big Bear stores, and (ii) an agent to assist in selling the furniture, fixtures and equipment at the Initial Closing Stores and the remaining Big Bear stores. This comprehensive sale process was substantially completed in February 2004. Following the above-described asset sale process, the Debtors formulated a restructuring plan that substantially reduces their debt and keeps their core business intact, including 111 Company-operated stores, the wholesale/franchise business and the Penny Curtiss bakery. 14. THE PBGC SETTLEMENT As described more fully in Section II.A.1.(g) herein entitled "The Company's Retirement Plans," the Company sponsors five defined benefit Pension Plans. As a result of recent declines in interest rates and the market value of the assets held in the Company's Pension Plans, the Debtors have accrued significant pension liabilities, requiring funding contributions in the aggregate amount of approximately $72 million over the next five years. The Company's Cash Balance Pension Plan, which is the principal retirement plan for the Company's non-union employees, requires over $48 million in funding over the next four years, including a payment in excess of approximately $24.5 million in fiscal year 2005. Early in the chapter 11 cases, the Company, in consultation with its financial advisors and the Creditors' Committee, determined that, unless the Cash Balance Pension Plan is terminated, the Company would be unable to pay all its debts pursuant to a plan of reorganization and would be unable to continue in business outside the chapter 11 reorganization process. Accordingly in May 2004, the Debtors filed an application with the PBGC for a distress termination of the Cash Balance Pension Plan under Section 4041(c)(2)(B)(iii) of ERISA. PBGC has filed three (3) proofs of claim in the Cases relating to the Cash Balance Pension Plan asserting (i) an unsecured priority claim for unfunded benefit liabilities (the "UNFUNDED BENEFITS CLAIM"), (ii) an unsecured priority claim for unpaid minimum funding contributions (the "UNPAID MINIMUM FUNDING CLAIM"), and (iii) an unsecured priority claim for unpaid premiums in an unliquidated amount (the "UNPAID 40 PREMIUMS CLAIM" and, together with the Unfunded Benefits Claim and the Unpaid Minimum Funding Claim, the "CASH BALANCE CLAIMS").(8) Assuming a distress termination of the Cash Balance Pension Plan, the Debtors dispute all three Cash Balance Claims. First, with respect to the Unfunded Benefits Claim, the principal dispute is the interest rate to be applied in calculating future liabilities under the Cash Balance Pension Plan. Second, with respect to the Unpaid Minimum Funding Claim, PBGC asserts that the entire claim should be treated as an administrative or unsecured priority tax claim in the Cases. The Debtors contend that only that portion of the claim accruing with respect to services rendered by employees post-petition should be afforded administrative status, while the remainder of the claim (accruing with respect to pre-petition employee service) should be disallowed as duplicative of a portion of the Unfunded Benefits Claim. Moreover, the Debtors assert that they have a valid preference claim under Section 547 of the Bankruptcy Code in the amount of $2 million arising from the Debtors' advance payment of a minimum funding contribution to the Cash Balance Pension Plan on March 18, 2003 (within 90 days of the Petition Date). Third, the Debtors assert that Unpaid Premiums Claim should be expunged because the Debtors are current in their payment of premiums for the Cash Balance Pension Plan. Finally, PBGC has raised the issue of whether, in view of the Debtors' joint and several liability under ERISA, PBGC would be prejudiced by the substantive consolidation of the Debtors as contemplated under the Plan. In January 2005, following extensive negotiations among the Company, the PBGC and the Creditors' Committee, a global settlement in principle (the "PBGC GLOBAL SETTLEMENT") was reached. The principal terms of the Global PBGC Settlement are as follows: o The Global Settlement Agreement is in anticipation of the termination and PBGC trusteeship of the Cash Balance Plan by means of a separate trusteeship agreement ("PBGC TRUSTEESHIP Agreement") between Penn Traffic and PBGC. If no such termination occurs by February 28, 2005 or if no PBGC Trusteeship Agreement is entered into on or before February 28, 2005, the Global Settlement Agreement and any action taken by any Party pursuant to the Global Settlement Agreement will be null and void AB INITIO; PROVIDED, HOWEVER, that the Debtors may waive, in consultation with the Committee, any failure of either or both of these requirements. - -------------------- (8) PBGC has filed the same three types of proofs of claim with respect to all four of the remaining defined benefit Pension Plans (the "Other Pension Plan Claims" and, together with the Cash Balance Claims, the "PBGC Claims"). 41 o In partial settlement of the Cash Balance Plan Claims, PBGC will have an Allowed Administrative Claim under the Plan on the Plan Effective Date in the amount of $155,378, to be paid in full and in cash on the earlier of (i) the Initial Distribution Date (as defined in the First Amended Plan) or (ii) twenty (20) days after the Plan Effective Date. o In further settlement of the Cash Balance Plan Claims, PBGC will have an Allowed Administrative Claim under the Plan on the Plan Effective Date in the amount of $3,500,000, to be paid, without interest, by Reorganized Penn Traffic in four equal installments bi-annually over a two year period commencing on the date that is six months following the Plan Effective Date, and to be secured until fully paid by the Post-Effective Date Trade Lien for so long as the Post-Effective Date Trade Lien Program is in effect and, thereafter, by a lien attached to the same collateral and on the same terms and of the same priority as under the Post-Effective Date Trade Lien Program. As the Post-Effective Trade Lien Program terms are not expected to have been fully negotiated as of the Agreement Effective Date, the Parties agree that if PBGC is not fully satisfied with regard to any term of its Post-Effective Date Trade Lien on or by the hearing with respect to Plan confirmation, at PBGC's exclusive discretion, the Global Settlement Agreement and any actions taken by any Party pursuant to the Global Settlement Agreement will be void AB INITIO, except for any prior termination of the Cash Balance Plan and any PBGC trusteeship of the Cash Balance Plan by means of the PBGC Trusteeship Agreement between Penn Traffic and PBGC. o In further settlement of the Cash Balance Plan Claims, PBGC will have an Allowed Class 3 Unsecured Claim under the Plan on the Plan Effective Date in the amount of $60,000,000 (the "PBGC ALLOWED UNSECURED CLAIM"). For purposes of voting on the Plan, PBGC will be entitled to vote with respect only to the PBGC Allowed Unsecured Claim. o In further settlement of the Cash Balance Plan Claims, the Debtors agree that the Plan will not be confirmed if it fails to provide that on and after the Plan Effective Date, Reorganized Penn Traffic will continue to sponsor, administer, and maintain the Remaining Pension Plans in accordance with their terms, with ERISA and with the Internal Revenue Code, including meeting the minimum funding standards under ERISA and the Internal Revenue Code, and paying all PBGC insurance premiums; PROVIDED, HOWEVER, that the foregoing provision of this sentence will not apply to confirmation of a liquidating Chapter 11 plan or a Chapter 7 42 liquidation. Notwithstanding the foregoing, Reorganized Penn Traffic reserves its rights, after the Plan Effective Date, to terminate, amend or freeze any of the Remaining Pension Plans in accordance with their terms, ERISA, the Internal Revenue Code or other applicable law. o As sponsor and administrator of the Remaining Pension Plans, Reorganized Penn Traffic specifically agrees to pay 1) to PBGC, the amount of unpaid PBGC premiums, if any, owed as of the Plan Effective Date with regard to the Remaining Pension Plans pursuant to 29 U.S.C. ss. 1307, and 2) into each of the Remaining Pension Plans, the amount of unpaid minimum funding contributions, if any, owed as of the Plan Effective Date for each of the Remaining Pension Plans, pursuant to section 412 of the Internal Revenue Code, 26 U.S.C. ss. 412(c)(11), and section 302 of ERISA, 29 U.S.C. ss. 1082(c)(11). All PBGC premium and minimum funding obligations owed to PBGC and/or the Remaining Plans will be paid in cash and in full, on the earlier of (i) the Initial Distribution Date (as defined in the First Amended Plan) or (ii) twenty (20) days after the Plan Effective Date. The minimum funding obligations owing through the end of March 2005 with regard to the Remaining Pension Plans are set forth in Exhibit I to this Disclosure Statement, a copy of which is attached to the Global Settlement Agreement. o The Debtors and the Committee will waive and release any and all claims arising under Sections 547, 548, or 549 of the Bankruptcy Code with respect to any and all payments made by or on behalf of the Debtors with respect to the Cash Balance Plan or the Remaining Pension Plans. o PBGC will not file an objection to Confirmation of the Plan, including without limitation, to the substantive consolidation of the Debtors as contemplated under the Plan. o The Committee will not file an objection to the PBGC Settlement Motion and will not object on its own behalf to any of the PBGC Claims. o If all terms of the Global Settlement Agreement have been satisfied as of the Plan Effective Date, and without reduction or other effect on the Allowed Claims and obligations set forth in the Global Settlement Agreement, the PBGC Claims will be deemed withdrawn, with prejudice, upon the Plan Effective Date. A condition precedent to the occurrence of the Effective Date of the Plan is the entry of a Final Order approving the PBGC Global Settlement. As soon as 43 practicable the Debtors will cause a motion (the "PBGC SETTLEMENT MOTION") to be filed with the Bankruptcy Court to obtain approval of the Global Settlement Agreement. The Debtors will give notice of such motion as required by applicable law and rules. If the Bankruptcy Court denies such motion or the Debtors are unable to confirm the Plan, as amended to reflect the terms of the Global Settlement Agreement, the Global Settlement Agreement and any actions taken by any Party pursuant to the Global Settlement Agreement will be void AB INITIO, except for any prior termination of the Cash Balance Plan and any PBGC trusteeship of the Cash Balance Plan by means of the PBGC Trusteeship Agreement between Penn Traffic and PBGC. 15. CURRENT OFFICERS AND DIRECTORS (a) CURRENT DIRECTORS (i) BYRON E. ALLUMBAUGH. Age: 72; Director since 1999. Mr. Allumbaugh is a business consultant. Mr. Allumbaugh was the Chairman and Chief Executive Officer of the former Ralphs Grocery Company from 1976 until he retired in 1997. Mr. Allumbaugh serves as a Director of CKE Restaurants, Inc. (quick-service restaurant company), El Paso Energy Company (natural gas and energy company), Galyan's Trading Co. (sporting goods company) and The Pantry (convenience store chain). (ii) RICHARD P. BRENNAN. Age: 47; Director since 2002. Since June of 2002 Mr. Brennan has been the Portfolio Manager and Managing Director responsible for the Special Situations Group at Soros Fund Management LLC. Prior to that time Mr. Brennan was the Managing Director responsible for all of the European credit businesses for Merrill Lynch as well as the head of European Credit for Donaldson, Lufkin and Jenrette. (iii) KEVIN P. COLLINS. Age: 53; Director since 1999. Mr. Collins has been a member and a Principal of The Old Hill Company, LLC (financial advisory services company) since 1997. Mr. Collins was a Principal of JHP Enterprises, Ltd. (financial advisory services) from 1991 to 1997. Mr. Collins serves as a Director of Key Energy Services, Inc. (provider of oilfield services to the oil and gas industry), London Fog Industries, Inc. (apparel company), and Metretek Technologies, Inc. (provider of information services to the energy industry). (iv) JAMES DEMME. Age: 64; Chairman of the Board since September 2003. Mr. Demme serves as an Investment Principal for Sterling Capital Management, Inc., a Birmingham, Alabama - based investment management and venture capital firm. In 1997 Mr. Demme joined Bruno's as Chairman and Chief Executive officer, engineering the Alabama-based supermarket company's successful reorganization. Bruno's was sold to Royal Ahold in 2001 and Mr. Demme retired from 44 Bruno's after leading a successful transition program. Prior to Bruno's Mr. Demme was Chairman, Chief Executive Officer and President of Homeland Stores, Inc. an Oklahoma-based supermarket company, which he also guided through a successful reorganization. Mr. Demme has also held senior management positions at the Scrivner Company, and served as President and Chief Operating Officer of Shaw's Supermarkets. Mr. Demme spent 20 years with the Great Atlantic and Pacific Tea Company, where he progressed through all store positions including Store Manager to Division Manager. (v) JOSEPH V. FISHER. Age: 62; Director since 1998. Mr. Fisher has been a Director of the Company since November 1998. He was President and Chief Executive Officer of the Company from November 1998 until August 2003. From 1992 to November 1998 Mr. Fisher held senior management positions with Big V Supermarkets, Inc. ("BIG V"), a regional supermarket company operating primarily under the Shop Rite name, including President and Chief Executive Officer from 1995 to 1998, Executive Vice President - Marketing and Operations and Chief Operating Officer from 1994 to 1995, Senior Vice President - Marketing and Operations from 1993 to 1994 and Vice President - Store Operations from 1992 to 1993. He also served as a Director of Big V from 1993 to 1998. Prior to joining Big V, Mr. Fisher was employed by Purity Supreme, Inc. (supermarket company), from 1973 to 1991 in various management positions, including Senior Vice President - Supermarkets from 1985 to 1991. (vi) MATTHEW GLASS. Age: 45; Director since 2002. Mr. Glass has worked in the special situations group of Soros Fund Management LLC as a Director since 2002. (vii) ROBERT L. HOCKETT. Age: 40; Director since 2003. Mr. Hockett is a principal at DDJ Capital Management, LLC, which he joined in 1996. Prior to DDJ, from 1994 to 1996, Mr. Hockett was Vice President and Analyst in the High Yield Department at Keystone Investments. Prior to that, from 1989 to 1994, Mr. Hockett was a Vice President in the Investment Banking Department at Salomon Brothers, Inc. Mr. Hockett has served on a number of Boards of Directors, including that of Bruno's Supermarkets, Inc. (viii) RICHARD D. HOLAHAN, JR. Age: 36; Director since 2002. Mr. Holahan is Assistant General Counsel of Soros Fund Management LLC, and has worked at Soros since 1999. Mr. Holahan is also a director of Seoul Securities Co. Ltd., a Korean broker dealer. (ix) PETER J. ZURKOW. Age: 50; Director since 1999. Mr. Zurkow was Chairman of the Board of the Company from June 1999 until September 2003. Since January 2002, Mr. Zurkow has been a 45 Managing Director of Investec, Inc. (investment banking firm). From April 2001 to December 2001, Mr. Zurkow was a private investor. From 1992 to April 2001, Mr. Zurkow was a Managing Director of UBS Warburg (January 2001 to April 2001) and its predecessor firm, Paine Webber, Inc. (1992 to 2000). He served as a Director of Streamline, Inc. (online grocery company) from 1997 to 1998, Kash N' Karry Supermarkets from 1994 to 1996 and E-artgroup.com (online art dealer) from 1999 to 2000. (b) CURRENT SENIOR OFFICERS (i) ROBERT J. CHAPMAN. Age: 53; President and Chief Executive Officer since April 2004. Mr. Chapman joined P&C Foods as a part time store employee in 1968 and became a store manager in 1974. Over the past 36 years, Mr. Chapman has held a number of positions of increasing authority first at P&C and later at Penn Traffic after it purchased P&C in 1988. He has distinguished himself as Director of Store Operations, Director of Franchise Operations and Vice President of Wholesale and Franchise Operations. Mr. Chapman has also served on a number of important Penn Traffic internal committees, including the Operations Steering Committee and the Strategic Business Reorganization Committee. (ii) CHARLES G. BOSTWICK. Age: 54; Vice President of Information Technology and Chief Information Officer. Mr. Bostwick has held the position of Vice President of Information Technology and Chief Information Officer, Penn Traffic, since 1998. From 1993 to 1998 Mr. Bostwick held top IT positions for various divisions of Whirlpool: Sears/Kenmore, Asian Division. Mr. Bostwick was Vice President, MIS & Chief Information Officer, Long's Drug Store, 1989 to 1993. In 1986 to 1989 he was Director of Computing and Communication Services, Bekins. (iii) TIMOTHY J. CIPITI. Age: 45; Vice President of Distribution and Manufacturing. Mr. Cipiti has been Vice President of Distribution and Manufacturing since 2001. He was Director of Distribution, Penn Traffic, from 1997 to 2001. He was Director of Re-Engineering and Governmental Affairs in 1997. From 1984 to 1997 Mr. Cipiti was employed by Vons Companies in various management positions. (iv) ROBERT B. DIMOND. Age: 43; Executive Vice President and Chief Financial Officer since January 2005. Prior to joining the Company, Mr. Dimond served as Executive Vice President, Chief Financial Officer and Treasurer of Nash Finch Company from 2000 through November, 2004. From 1999 through 2000, Mr. Dimond served as Group Vice President and CFO of Kroger Co. Western Region. 46 (v) STEPHEN H. ERDLEY. Age: 49; Vice President of Perishable Merchandising. Mr. Erdley has been Vice President of Perishable Merchandising since 2003. He held the position of Vice President, Meat, Seafood, and Deli from1998 to 2003. Prior to moving to Corporate Headquarters in Syracuse, NY, as a result of corporate consolidation in 1997, Mr. Erdley held various Manager positions at the Bi-Lo/Riverside Division. (vi) LINDA J. JONES. Age: 45; Vice President, Non Perishables Merchandising. Ms. Jones has been Vice President, Non Perishable Merchandising since 2003. From 2000 to 2003 she was Vice President, Grocery, Dairy, Frozen, DSD Division. Ms. Jones was Vice President of Sales and Advertising from 1999 to 2000. From 1997 to 1999 she held the position of Vice President of Sales. Prior to her relocating to Corporate Headquarters in Syracuse, NY, Ms. Jones held various positions at the Bi-Lo/Riverside Division in DuBois including Vice President of Grocery Procurement. (vii) LESLIE H. KNOX. Age: 58; Senior Vice President - Chief Marketing Officer. Mr. Knox has been Senior Vice President and Chief Marketing Officer since May 1999. From 1995 until May 1999, Mr. Knox held the position of Vice President - Merchandising with Weis Markets, Inc. From 1984 until 1995, Mr. Knox held various management positions with ABCO Markets, Inc., including Senior Vice President of Sales and Marketing from 1988 to 1995. From 1969 to 1984, Mr. Knox was employed by Alpha Beta Company, a division of American Stores Company, in various management positions. (viii) TERRY A. KUSHNER. Age: 52; Vice President, Advertising & Marketing. Mr. Kushner has been Vice President, Sales and Marketing since 2003. From 2000 to 2003 Mr. Kushner was Marketing and Community Relations Consultant, T.A. Kushner & Associates, LLC. He was Assistant Circulation Director, Consumer Sales and Marketing, The Plain Dealer from 1998 to 2000. Vice President, Marketing and Advertising for Riser Foods Company/Giant Eagle from 1996 to 1998. Previously he held various positions from 1969 to 1996 at Finast/Tops/Royal Ahold. (ix) DONALD E. LUKE. Age: 53; Director of Corporate Planning and Assistant Treasurer. Mr. Luke is presently Director of Corporate Planning and Assistant Treasurer. From 1994 to 2000 Mr. Luke was Director of Corporate Planning for Penn Traffic. From 1986 to 1994 he held the position of Director of Corporate Planning for P&C Foods. From 1978 to 1986 Mr. Luke was employed by United Technologies as a Senior Financial Analyst. 47 (x) RANDY P. MARTIN. Age: 48; Vice President - Finance and Chief Accounting Officer. Mr. Martin has been Vice President - Finance and Chief Accounting Officer of Penn Traffic since January 1999. From 1997 until January 1999, he served as the Company's Vice President of Strategic Planning and Treasurer. From 1993 to 1997, Mr. Martin served as the Company's Director of Taxes. From 1984 to 1993, Mr. Martin was employed by Price Waterhouse in various positions, including Senior Tax Manager from 1991 to 1993. (xi) STEVEN B. MIDDLETON. Age: 50; Vice President of Asset Protection and Government Compliance since 2004. He was Corporation Director of Asset Protection from 1999 to 2004. From 1997 to 1999 he was Director of Warehouse Security for Penn Traffic. From 1992 to 1997 he was Director of Loss Prevention, Riverside/Bi-Lo Markets, Division of Penn Traffic. From 1988 to 1992 he was Senior Loss Prevention Specialist. From 1981 to 1988 he was P&C Loss Prevention Specialist. (xii) WILLIAM B. MURPHY. Age: 50; Associate Director of Restructuring. Mr. Murphy is a senior director at Kroll Zolfo Cooper LLC and served as Interim Chief Financial Officer of Penn Traffic from the Petition Date through the engagement of Robert Dimond as permanent Chief Financial Officer in January 2005. Prior to joining Kroll Zolfo Cooper in 1997, Mr. Murphy was a partner in the restructuring group of Ernst and Young, where he worked for 15 years. Previously he also worked for Main Hurdman (now KPMG). (xiii) STEVEN G. PANAGOS. Age: 42; Chief Restructuring Officer. Mr. Panagos is a Managing Director and the National Practice Leader of the Corporate Advisory & Restructuring practice of Kroll Zolfo Cooper LLC. Mr. Panagos is currently serving as the Chief Restructuring Officer and formerly served as interim CEO of Penn Traffic. He has held a number of interim management positions, including Chief Restructuring Officer of Metromedia Fiber Network and interim CEO of Crown Brooks. Prior to joining Kroll Zolfo Cooper in 1988, Steve was Controller for Van Wagner Communications, a media and advertising conglomerate. Previously, Mr. Panagos also worked for Main Hurdman (now KPMG). (xiv) FRANCIS D. PRICE, JR. Age: 55; Vice President, General Counsel and Secretary. Mr. Price has been Vice President and General Counsel since 1993 and became Secretary in 1997. Mr. Price was Vice President and General Counsel of the Company's P&C division from 1985 until 1993. From 1978 to 1985, Mr. Price served in various other management positions at P&C. 48 III. FUTURE BUSINESS OF THE REORGANIZED DEBTORS A. STRUCTURE AND BUSINESS OF THE REORGANIZED DEBTORS Following the Effective Date, the Reorganized Debtors intend to continue to conduct their business essentially as restructured and consolidated during the pendency of the Cases except for the Debtors which are dissolved pursuant to the Plan. See Section I.D., entitled "General Structure of the Plan." In addition, the Reorganized Debtors will be subject to fresh start accounting rules. See Section III.C., entitled "Projected Financial Information." As more fully described in Section II.C. hereof, the Reorganized Debtors will continue to operate retail supermarkets in New York, Pennsylvania and New England. The Reorganized Debtors also intend to continue with their franchise operations and to operate a wholesale commercial bakery. In addition, as set forth in Section 5.4. of the Plan, certain inactive subsidiaries of the Debtors will be merged into Penn Traffic and will no longer exist as of the Effective Date. B. EXECUTIVE OFFICERS AND DIRECTORS OF THE REORGANIZED DEBTORS As set forth in Section II.C.9., entitled "The Chapter 11 Cases - Management" the Debtors' current Chief Restructuring Officer, Stephen G. Panagos, and the Debtors' Interim Chief Financial Officer, William B. Murphy, joined the Debtors from KZCS in May 2003. Messrs. Panagos and Murphy will return to their practice at Kroll Zolfo Cooper LLC after the Debtors emerge from chapter 11. In April 2004, the Debtors appointed Robert J. Chapman as President and Chief Executive Officer. SEE Section II.C.9. entitled "The Chapter 11 Cases - - Management." Mr. Chapman will remain with the Company as President and Chief Executive Officer following the Effective Date. In January 2005, the Debtors appointed Robert Dimond as Executive Vice President and Chief Financial Officer. SEE Section II.C.9. entitled "The Chapter 11 Cases - Management." Pursuant to Section 5.6. of the Plan, the Debtors will file Plan Schedule 5.6 with the Bankruptcy Court on or before the Exhibit Filing Date setting forth the offices, names and affiliations of, and the compensation proposed to be paid to, the individuals intended to serve as directors and officers of each Reorganized Debtor on and after the Effective Date. The initial board of directors of Reorganized Penn Traffic will consist of seven members, four of which will be designated by the Committee, two of which will be designated by the holders of a majority of the Senior Notes and one of which will be Robert J. Chapman. On and after the Effective Date, each Reorganized Debtor will be governed in accordance with the Amended Certificates of Incorporation and Amended Bylaws. C. PROJECTED FINANCIAL INFORMATION The Debtors have prepared the Projections for the years 2005 through 2008, which are attached hereto as EXHIBIT E and discussed in Section VI.C.3. hereof, entitled "Feasibility of the Plan." 49 THE DEBTORS HAVE PREPARED THE PROJECTIONS ATTACHED AS EXHIBIT E TO THIS FIRST AMENDED DISCLOSURE STATEMENT IN CONNECTION WITH THE PLANNING AND DEVELOPMENT OF THE PLAN. THE PROJECTIONS INCLUDE A PRO-FORMA REORGANIZED BALANCE SHEET AT MARCH 26, 2005, INCLUDING ESTIMATED REORGANIZATION AND FRESH START ADJUSTMENTS. THE PROJECTIONS ASSUME THAT THE PLAN SUCCESSFULLY WILL BE IMPLEMENTED ON THE TERMS DESCRIBED IN THIS FIRST AMENDED DISCLOSURE STATEMENT. THE PROJECTIONS, WHICH WERE PREPARED AS DESCRIBED THEREIN, ARE SUBJECT TO BUSINESS, ECONOMIC AND OTHER UNCERTAINTIES INHERENT IN DEVELOPING PROJECTIONS, AS DISCUSSED IN SECTION VI.C.3. HEREOF, ENTITLED "FEASIBILITY OF THE PLAN." The Projections have been made pursuant to the safe harbor provisions of 11 U.S.C. ss. 1125 that reflect when made, expectations or beliefs concerning future events that invoke risks and uncertainties. Any statements contained herein (including, without limitation, statements to the effect that the Debtors or their management or Board of Directors "believe," "anticipate," "expect," "plan," "estimate," "project," "will be," "will continue," "will likely result" and similar expressions) that are not statements of historical fact should be considered forward-looking statements. Forward-looking statements and the Debtors' plans and expectations are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Debtors, or their management or Board of Directors. As noted in Section VI.C.3., entitled "Feasibility of the Plan," the assumptions underlying the Projections are subject to significant business, economic and competitive uncertainties and contingencies, including those set forth in the Risk Factors set forth below, many of which are beyond the Debtors' control. There generally will be a difference between projections of future performance and actual results because certain events and circumstances may not occur as expected. These differences could be material. 1. RISK FACTORS (a) THE SUPERMARKET INDUSTRY IS HIGHLY COMPETITIVE. IF PENN TRAFFIC IS UNABLE TO COMPETE EFFECTIVELY, ITS FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY AFFECTED. The supermarket industry is highly competitive and characterized by high inventory turnover and narrow profit margins. The number and type of competitors vary by location and include: o multi-regional and regional supermarket chains; o independent and specialty grocers; o drug and convenience stores; and 50 o "alternative format" food stores, such as specialty food stores, retail drug stores, national general merchandisers and discount retailers, membership clubs, warehouse stores and super centers. Penn Traffic also faces increasing competition from restaurants and fast food chains due to the increasing proportion of household food expenditures for food prepared outside the home. In addition, certain of Penn Traffic's stores also compete with local video stores, florists, book stores, pharmacies and gas stations. Penn Traffic's principal competitors include national and regional supermarket chains which compete with us on the basis of location, quality of products, service, price, product variety and store condition. An overall lack of inflation in food prices and increasingly competitive markets has made it difficult generally for grocery store operators to achieve comparable store sales gains. Because sales growth has been difficult to attain, Penn Traffic's competitors have attempted to maintain market share through increased levels of promotional activities and discount pricing, creating a more difficult environment in which to consistently increase year-over-year sales gains. In addition, some of Penn Traffic's "nontraditional" competitors are not unionized and therefore have lower labor costs, which allow them to take measures that could adversely affect our competitive position. Penn Traffic faces increased competitive pressure in all of Penn Traffic's markets from existing competitors and from the threatened entry by one or more major new competitors. Some of Penn Traffic's competitors have greater financial resources and are less leveraged and could use these resources to take measures which could adversely affect Penn Traffic's competitive position. These competitive pressures have been enhanced by the decline in size of Penn Traffic's operations as a result of the sales of its Big Bear operations and assets. Penn Traffic's business, financial condition or results of operations could be adversely affected by competitive factors, including product mix and pricing changes which may be made in response to competition from existing or new competitors. From time to time, the relative strength of Penn Traffic's competitors changes depending on prevailing market conditions. (b) PENN TRAFFIC'S BUSINESS MAY BE SENSITIVE TO ECONOMIC CONDITIONS THAT IMPACT CONSUMER SPENDING. Penn Traffic's results of operations may be sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending. Future economic conditions affecting disposable consumer income such as employment levels, energy prices, business conditions, interest rates and tax rates could reduce consumer spending or cause consumers to shift their spending to Penn Traffic's competitors. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending to our competitors could adversely affect Penn Traffic's growth and profitability. 51 (c) PENN TRAFFIC MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR COMPARABLE STORE SALES. Penn Traffic's comparable store sales in the future could fluctuate or be lower than Penn Traffic's historical average for many reasons including increased competition, price changes in response to competitive factors, and possible supply shortages. Results of operations may be materially impacted by fluctuations in Penn Traffic's comparable store sales as it becomes more difficult to leverage expenses at a lower level of sales. (d) PENN TRAFFIC'S STORES ARE CONCENTRATED IN THE NORTHEASTERN UNITED STATES, MAKING IT VULNERABLE TO ECONOMIC DOWNTURNS, NATURAL DISASTERS AND OTHER ADVERSE CONDITIONS OR OTHER CATASTROPHIC EVENTS IN THIS REGION. Penn Traffic is mainly concentrated in Pennsylvania, upstate New York, Vermont and New Hampshire. As a result, Penn Traffic is vulnerable to economic downturns in those areas, in addition to those that may affect the country as a whole, as well as natural and other catastrophic events that may impact these regions. These events may adversely affect Penn Traffic's sales which may lead to lower earnings, or even losses, and may also adversely affect Penn Traffic's future growth and expansion. (e) LOSSES AS A RESULT OF PENN TRAFFIC'S OWNING AND DEVELOPING REAL ESTATE MAY IMPAIR PENN TRAFFIC'S ABILITY TO FOCUS ON AND EXPAND CORE BUSINESS AS DESIRED. As a result of Penn Traffic's real estate holdings, Penn Traffic is subject to varying degrees of risk and liability generally incident to the ownership and development of real estate. These risks and liabilities include, among other things: o fluctuations in value caused by adverse changes in national, regional and local economic conditions, and local real estate market conditions (such as an oversupply of or a reduction in demand for retail space in the area); o costs of compliance with zoning, environmental, tax and other laws and regulations; o real estate development risks, such as incorrect cost and occupancy estimates, non-availability of financing and the need for mortgage lender or property partner approvals for certain expansion activities; o the perceptions of customers and tenants and prospective tenants of the safety, convenience and attractiveness of Penn Traffic's properties; 52 o the lack of liquidity of real estate investments and Penn Traffic's ability to sell or lease any of Penn Traffic's properties for cash in a timely fashion; o failure to promptly renew leases; o the quality, philosophy and performance of Penn Traffic's management; o competition from comparable properties; o the occupancy rate of Penn Traffic's properties; o tenant defaults and the costs of enforcing Penn Traffic's rights; o the effects of any bankruptcies or insolvencies of major tenants; o increasing operating costs (including increased real estate taxes) which may not be passed through fully to tenants; and o fluctuations in mortgage interest rates. A failure to adequately deal with these risks and liabilities could limit Penn Traffic's revenues and available cash and could have a material adverse effect on Penn Traffic's business, financial condition or results of operations. A significant portion of Penn Traffic's properties are mortgaged to secure payment of indebtedness, and if Penn Traffic was unable to meet mortgage payments, losses could be sustained as a result of foreclosure on the properties by the various mortgagees. In addition, if it becomes necessary or desirable for Penn Traffic to dispose of one or more of the mortgaged properties, Penn Traffic might not be able to obtain release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or the inability to sell a property could adversely affect Penn Traffic's business, financial condition or results of operations. These considerations could make it difficult for Penn Traffic to sell properties, even if a sale were in Penn Traffic's best interests. Penn Traffic maintains property insurance, difference in conditions, insurance, national flood insurance (where applicable), general liability insurance, and excess insurance coverage. At leased and mortgaged locations Penn Traffic maintains any of these lines of coverage that it is contractually obligated to maintain. At owned locations Penn Traffic maintains all of these lines of coverage. Penn Traffic maintains large deductibles and/or large layers of self-insurance on several of these lines of coverage. 53 (f) VARIOUS ASPECTS OF PENN TRAFFIC'S BUSINESS ARE SUBJECT TO FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS. PENN TRAFFIC'S COMPLIANCE WITH THESE REGULATIONS MAY REQUIRE ADDITIONAL CAPITAL EXPENDITURES AND COULD ADVERSELY AFFECT ITS ABILITY TO CONDUCT OUR BUSINESS AS PLANNED. Penn Traffic is subject to federal, state and local laws and regulations relating to zoning, land use, environmental protection, work place safety, public health, beer and wine sales and pharmaceutical sales. A number of states and local jurisdictions regulate the licensing of supermarkets, including beer and wine license grants. In addition, under certain local regulations, Penn Traffic is prohibited from selling beer and wine in certain of its stores. Employers are also subject to laws governing their relationship with employees, including minimum wage requirements, overtime, working conditions, disabled access and work permit requirements. Compliance with, or changes in, these laws could reduce the revenue and profitability of Penn Traffic's supermarkets and could otherwise adversely affect our business, financial condition or results of operations. A number of federal, state and local laws exist which impose burdens or restrictions on owners with respect to access by disabled persons. Penn Traffic's compliance with these laws may result in modifications to Penn Traffic's properties, or prevent it from performing certain further renovations, with respect to access by disabled persons. (g) PENN TRAFFIC IS AFFECTED BY FLUCTUATING UTILITY AND FUEL COSTS. Fluctuating fuel costs adversely affect Penn Traffic's operating costs in that Penn Traffic requires fuel for its fleet of tractors and trailers which distribute goods from its warehouse and distribution facility to all of its stores. In addition, operations at its stores are sensitive to rising utility fuel costs due to the amount of electricity and gas required to operate stores. Penn Traffic may not be able to recover these rising utility and fuel costs through increased prices charged to its customers. (h) PENN TRAFFIC FACES THE RISK OF BEING HELD LIABLE FOR ENVIRONMENTAL DAMAGES THAT MAY OCCUR. Penn Traffic's operations subject it to various laws and regulations relating to the protection of the environment, including those governing the management and disposal of hazardous materials and the cleanup of contaminated sites. Under some environmental laws, such as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, also known as CERCLA or the Superfund law, and similar state statutes, responsibility for the entire cost of cleanup of a contaminated site can be imposed upon any current or former site owners or operators, or upon any party who sent waste to the site, regardless of the lawfulness of the original activities that led to the contamination. From time to time Penn Traffic has been named as one of many potentially responsible parties at Superfund sites, although Penn Traffic's share of liability has typically been de minimis. Penn Traffic believes it is currently in substantial compliance with applicable environmental requirements. However, future developments such as more aggressive enforcement policies, new laws or discovery of unknown 54 conditions may require expenditures that may have a material adverse effect on Penn Traffic's business and financial condition. (i) PENN TRAFFIC HAS NOT FILED PERIODIC REPORTS WITH THE SECURITIES AND EXCHANGE COMMISSION. As a result of its declining operating performance and in order to conserve its cash resources, the Company has not completed its audit for the fiscal year ended February 1, 2003 and has not made any required periodic filings with the SEC for any period since the period ended for the fiscal year ending February 1, 2003. Because of its failure to make timely periodic filings with the SEC, Penn Traffic could be subject to civil penalties and other administrative proceedings by the SEC for failure to keep current with its periodic filing requirements. In addition, until Penn Traffic has completed such updated filings, it is unlikely that the New Penn Traffic Common Shares will be approved for listing or quotation on any national securities exchange or on NASDAQ. The failure of the New Penn Traffic Common Shares to be so listed or quoted may adversely affect their liquidity and trading price. (j) THERE IS NO EXISTING TRADING MARKET FOR THE NEW PENN TRAFFIC COMMON SHARES. The New Penn Traffic Common Shares will be a new issue of securities for which there is currently no trading market, and there can be no assurance that an active trading market will develop. The Company does not expect to apply for listing or quotation on any national securities exchange or on NASDAQ in the near future. Accordingly, no assurance can be given that a holder of New Penn Traffic Common Shares will be able to sell such securities in the future or as to the price at which any such sale would occur. If such market were to develop, the liquidity of the market for such securities and the prices at which such securities would trade will depend upon many factors, including the number of holders, investor expectations for the Company, and other factors beyond the Company's control. In addition, the New Penn Traffic Common Shares will be issued to pre-petition creditors of the Debtors, some of whom may prefer to liquidate their investment rather than to hold it on a long-term basis, which may create an initial imbalance in the market if and when one were to develop. 55 (k) THE ONGOING GOVERNMENTAL INVESTIGATIONS MAY HAVE AN ADVERSE EFFECT ON THE COMPANY. As described in Section II.C.12., there are ongoing investigations by governmental authorities relating to the Company's accounting practices. The Company has not been told by these authorities what the focus of their investigations are, and thus the Company is unable to assess the possible consequences of the investigations. Accordingly, there can be no assurance that the result of the investigations will not have an adverse effect on the Company or the value of the New Penn Traffic Common Shares. IV. SUMMARY OF THE PLAN OF REORGANIZATION THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE AND IMPLEMENTATION OF THE PLAN, TOGETHER WITH THE CLASSIFICATION AND TREATMENT OF CLAIMS UNDER THE PLAN, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN, WHICH ACCOMPANIES THIS FIRST AMENDED DISCLOSURE STATEMENT, AND TO THE EXHIBITS AND SCHEDULES ATTACHED THERETO. ALTHOUGH THE STATEMENTS CONTAINED IN THIS FIRST AMENDED DISCLOSURE STATEMENT INCLUDE SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN AND IN DOCUMENTS REFERRED TO THEREIN, THIS FIRST AMENDED DISCLOSURE STATEMENT DOES NOT PURPORT TO BE A PRECISE OR COMPLETE STATEMENT OF ALL THE TERMS AND PROVISIONS OF THE PLAN OR DOCUMENTS REFERRED TO THEREIN, AND REFERENCE IS MADE TO THE PLAN AND TO SUCH DOCUMENTS FOR THE FULL AND COMPLETE STATEMENTS OF SUCH TERMS AND PROVISIONS. THE PLAN ITSELF AND THE DOCUMENTS REFERRED TO THEREIN WILL CONTROL THE TREATMENT OF CLAIMS AND INTERESTS OF CREDITORS AND EQUITY SECURITY HOLDERS UNDER THE PLAN AND WILL, UPON THE EFFECTIVE DATE, BE BINDING UPON HOLDINGS OF CLAIMS AGAINST, OR INTERESTS IN, THE DEBTORS, THE REORGANIZED DEBTORS, AND OTHER PARTIES IN INTEREST. 56 A. INTRODUCTION Penn Traffic believes that (i) through the Plan, holders of Allowed Claims will obtain a recovery from the estates of the Debtors that is at least equal to, and likely greater than, the recovery they would receive if the assets of the Debtors were liquidated under chapter 7 of the Code and (ii) the Plan will afford the Debtors the opportunity and ability to continue in business as a viable going concern and preserve ongoing employment for the Debtors' employees. The Plan is annexed hereto as EXHIBIT A and forms a part of this First Amended Disclosure Statement. The summary of the Plan set forth below is qualified in its entirety by reference to the provisions of the Plan. B. BRIEF EXPLANATION OF CHAPTER 11 PLAN OF REORGANIZATION Chapter 11 is the principal business reorganization chapter of the Code. Under chapter 11, a debtor is authorized to reorganize its business for the benefit of its creditors and equity security holders. In addition to facilitating the rehabilitation of the debtor, reorganization under chapter 11 is intended to promote equality of treatment of creditors and equity security holders of equal rank with respect to the distribution of the debtor's assets. In furtherance of these goals, upon filing of a petition for reorganization under chapter 11, Section 362 of the Code generally provides for an automatic stay of substantially all actions and proceedings against the debtor and its properties, including attempts to collect debtors or enforce liens that arose prior to the commencement of the debtor's case under chapter 11. Consummation of a plan of reorganization is the principal objective of a chapter 11 reorganization case. In general, a chapter 11 plan of reorganization: (a) divides most claims and interests into classes; (b) specifies the property, distribution or other treatment that each member of a class is to receive under the plan on account of its claim or interest, if any; and (c) contains other provisions necessary or appropriate to the reorganization of the debtor. Confirmation of a plan of reorganization by a bankruptcy court makes the plan binding upon the debtor, any issuer of securities under the plan, any person acquiring property under the plan and any creditor or interest holder of the debtor. Except as specifically provided in the plan of reorganization or the order confirming the plan, the order confirming the plan discharges the debtor from any debt that arose prior to the date that the plan becomes effective to the fullest extent authorized or provided for by the Code or other applicable law, and substitutes for such indebtedness the obligations specified in the plan of reorganization. 57 C. SUBSTANTIVE CONSOLIDATION The Plan provides for substantive consolidation of the Debtors' estates. Substantive consolidation is an equitable remedy that a bankruptcy court may be asked to apply in chapter 11 cases involving affiliated debtors. Substantive consolidation involves the pooling and merging of the assets and liabilities of the affected debtors. All of the debtors in the substantively consolidated group are treated as if they were a single corporate and economic entity. Consequently, a creditor of one of the substantively consolidated debtors is treated as a creditor of the substantively consolidated group of debtors and issues of individual corporate ownership of property and individual corporate liability on obligations are ignored. Substantive consolidation of two or more debtors' estates generally results in (i) the deemed consolidation of the assets and liabilities of the debtors, (ii) the deemed elimination of intercompany claims, joint and several liability claims and guarantees, and (iii) the payment of allowed claims from a common fund. It is well established that Section 105(a) of the Code empowers a bankruptcy court to authorize substantive consolidation. 11 U.S.C. ss. 105(a). The United States Court of Appeals for the Second Circuit, the circuit in which the Chapter 11 Cases are pending, has articulated a test for evaluating a request for substantive consolidation. SEE UNITED SAV. BANK V. AUGIE/RESTIVO BAKING CO. (IN RE AUGIE/RESTIVO BAKING CO.), 860 F.2d 515 (2d Cir. 1988). The test, as formulated by the Second Circuit, considers "(i) whether creditors dealt with the entities as a single economic unit and did not rely on their separate identity in extending credit . . . or (ii) whether the affairs of the debtor are so entangled that consolidation will benefit all creditors." If either factor is satisfied, substantive consolidation is appropriate. The Debtors believe that both prongs of the AUGIE/RESTIVO test can be satisfied and, therefore, substantive consolidation of the Penn Traffic entities for voting and distribution purposes is appropriate. A number of factors strongly support this conclusion, including: o Prior to filing chapter 11, Penn Traffic and its subsidiaries issued only consolidated financial statements. o Creditors of Penn Traffic and its subsidiaries extend credit based on the overall financial condition of the consolidated entities, not on an entity-by-entity basis. o Penn Traffic and its subsidiaries maintain a consolidated cash management system. o Penn Traffic purchases all inventory and books all accounts receivable on behalf of the consolidated entity. 58 o Corporate overhead for the consolidated entity is booked and paid by Penn Traffic and is not allocated to separate entities. o The pre and post-petition working capital facility used to fund the Company's operations is the joint and several obligation of each separate entity (through direct obligor or guarantor status), although borrowings benefit the separate entities disproportionately. o Penn Traffic borrows funds under the Company's working capital facility, and then provides liquidity to the subsidiaries as needed through intercompany loans. o All intercompany loans were cancelled and forgiven pursuant to the Company's 1999 plan of reorganization. o The Company has consolidated risk management, insurance procurement, payroll and benefits. o Almost all of the Company's employees are employed by Penn Traffic, although many of them also provide services and benefits to the subsidiaries. o Penn Traffic and its subsidiaries have overlapping officers and directors. o Penn Traffic and its subsidiaries file consolidated federal tax returns and state tax returns in New York and Ohio. o There are approximately 6,000 scheduled and filed proofs of claims in the Debtors' chapter 11 cases; it would be extremely costly and time consuming - requiring protracted and expensive litigation - to try to determine (if at all possible) which claims are properly asserted against which Debtor entities. In addition to satisfying the AUGIE/RESTIVO test, the Debtors believe that substantive consolidation of the Penn Traffic entities is appropriate because, in a reorganization on a separate entity basis, creditors with claims against one or more separate entities would not receive appreciably greater distributions as compared with recoveries on a consolidated basis. By way of background, there are thirteen (13) separate Debtor entities in these chapter 11 cases. Five of the entities - Dairy Dell, Inc., Commander Foods, Inc., Abbott Realty Corporation, Bradford Supermarkets, Inc. and Big Bear Distribution Company - are inactive corporations with no assets or operations. Four of the Debtor entities are active, but have nominal value as stand-alone companies: (i) Penny Curtiss Baking Company, Inc. is a New York corporation that manufactures and distributes fresh and frozen baked goods for distribution to Penn Traffic's stores and 59 third-party customers, and the majority of its business is with Penn Traffic; (ii) Big M Supermarkets, Inc., a New York corporation, is a franchiser, wholesaler and service provider for various independent retail grocers and it is reliant on the retail operations of Penn Traffic to maintain a competitive advantage in its markets due to economies of scale in distribution and corporate overhead; (iii) Pennway Express, Inc. is a Pennsylvania corporation that operates a trucking and freight business, the majority of which is with Penn Traffic; and (iv) P&C Food Markets, Inc. of Vermont is a Vermont corporation that holds certain Vermont state licenses utilized in the operations of certain Penn Traffic supermarkets. There are only four Debtors having any material value: (i) The Penn Traffic Company, a Delaware corporation, holds the majority of the Company's operating assets, and is the direct or indirect owner of all of the Debtors; (ii) Sunrise Properties, Inc. ("SUNRISE") is a Pennsylvania corporation that owns and leases real property, primarily in connection with the Debtors' supermarket operations; (iii) PT Fayetteville/Utica, LLC is a New York limited liability company that owns the real and person property for a supermarket in Fayetteville, New York; and (iv) P.T. Development, LLC is a New York limited liability company that holds a 1% interest in PT Fayetteville/Utica, LLC (PT Development, LLC and PT Fayetteville/Utica LLC, together, "FAYETTEVILLE/UTICA"). For purposes of determining whether creditors with claims against non-Penn Traffic Debtors would recover more on a separate entity, rather than a consolidated, basis, the Debtors have ascribed net asset value only to Penn Traffic, Sunrise and Fayetteville/Utica. The assets of Sunrise and Fayetteville/Utica - principally real estate - were valued on a liquidation basis (rather than as a percentage of the Company's overall enterprise value, which would result in lower values for Sunrise and Fayetteville/Utica). The Debtors then allocated the Company's assumed total debt at emergence (comprised of borrowed debt, pension debt and capital lease debt) across Penn Traffic, Sunrise and Fayetteville/Utica based on total asset value.(9) The analysis does not, however, include allocations of any scheduled or filed claims to Sunrise or Fayetteville/Utica.(10) Finally, the Debtors allocated corporate overhead expenses to Sunrise and Fayetteville/Utica. Based on this analysis, the Debtors have concluded that Sunrise and Fayetteville/Utica have net asset values of no more than approximately $800,000.00 and $3 million, respectively, and Penn Traffic's net asset value is approximately $120 million. In view of the relatively negligible asset values at Sunrise and Fayetteville/Utica compared to the difficulty and expense of formulating separate plans of reorganization for Penn Traffic, Sunrise and Fayetteville/Utica (including the monumental task of - ------------------------- (9) This is a conservative assumption - because Sunrise and Fayetteville/Utica will be jointly and severally liable on the entire indebtedness, it is arguable that the entire indebtedness should be allocated to each entity, thereby eliminating their asset value. (10) Such an allocation would increase liabilities, and decrease asset values, at Sunrise and Fayetteville/Utica. 60 allocating claims appropriately to each of the Debtor entities), substantive consolidation of the Debtors is reasonable, fair and appropriate in these Cases. At the Confirmation Hearing, the Debtors will seek the substantive consolidation of the Chapter 11 Cases for all purposes related to the Plan, including, without limitation, for purposes of voting, confirmation and distribution. Subject to the occurrence of the Effective Date, (i) all assets and liabilities of the Subsidiaries will be deemed merged or treated as though they were merged into and with the assets and liabilities of Penn Traffic, (ii) no distributions will be made under the Plan on account of intercompany Claims among the Debtors and any such Claims will be discharged on the Effective Date, (iii) no distributions under the Plan will be made on account of equity interests in Penn Traffic subsidiaries, (iv) all guarantees of the Debtors of the obligations of any other Debtor will be deemed eliminated so that any Claim against any Debtor and any guarantee thereof executed by any other Debtor and any joint or several liability of any of the Debtors will be deemed to be one obligation of the consolidated Debtors, and (v) each and every Claim filed or to be filed in the Chapter 11 Case of any of the Debtors will be deemed filed against the consolidated Debtors, and will be deemed one Claim against and obligation of the consolidated Debtors. Such substantive consolidation will not (other than for purposes related to the Plan) affect (i) the legal and corporate structures of the Reorganized Debtors, (ii) equity interests in Penn Traffic subsidiaries and (iii) Pre- and Post-Petition Date guarantees that are required to be maintained (a) in connection with executory contracts, unexpired leases or credit facilities that were entered into during the Chapter 11 Cases or that have been or will be assumed, or (b) pursuant to the Plan, or (c) in connection with any financing entered into by the Reorganized Debtors on the Effective Date. D. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS 1. GENERAL Section 1123 of the Code requires a plan to classify certain claims against and interests in a debtor. In accordance with Section 1123, Article II of the Plan divides Claims and Interests into six Classes for the Debtors. Pursuant to Section 1123(a)(1) of the Code, Administrative Claims, including the DIP Facility Claim and Priority Tax Claims, are not classified in the Plan and are treated separately under Article II of the Plan. Article II of the Plan also sets forth the treatment that each Class will receive under the Plan, and provides whether or not each Class is impaired under the Plan. Section 1122 of the Code provides that, except for certain unsecured claims that may be classified for administrative convenience, a plan may place a claim or interest in a particular class only if the claim or interest is substantially similar to the other claims or interests of that class. The Plan designates (a) five classes of Claims for the Debtors and (b) one class of Interests. This classification scheme takes into account the differing nature and priority of such Claims and Interests under the Code and other applicable laws in light of their treatment under the Plan. The Debtors believe that they have classified all Claims and Interests in compliance with the provisions of Section 1122 of the Code. It is possible, however, that a holder of a Claim or Interest may challenge 61 these classifications, and the Bankruptcy Court may find that a different classification is required for the Plan. In the event that the Bankruptcy Court finds that a different classification is required for the Plan to be confirmed, the Debtors may seek to: (a) modify the Plan pursuant to Section 1127 of the Code to provide for whatever reasonable classification might be required for Confirmation and (b) use the acceptances received from the holder of any Claim or Interest pursuant to Solicitation for the purpose of obtaining the approval of the Class or Classes of which such holder ultimately is deemed to be a member. Such acceptances may be used for this purpose only if such reclassification does not adversely affect the treatment of such holder. There can be no assurance that the Bankruptcy Court, after finding that a classification was inappropriate and requiring a reclassification, would approve the Plan based upon such reclassification. Section 1123(a)(4) of the Code provides that a plan must afford the same treatment for all members of a particular class, unless the holder of a particular claim or interest agrees to less favorable treatment. The Debtors believe that the Plan complies with Section 1123(a)(4). In the event that the Bankruptcy Court finds that the Plan violates Section 1123(a)(4) and the holders of Claims or Interests affected do not consent to the Plan's treatment, the Bankruptcy Court could deny Confirmation of the Plan or require modifications to address the requirements of such Section. A Claim or Interest will be deemed classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and will be deemed classified in a different Class to the extent that any remainder of the Claim or Interest qualifies within the description of such different Class. A Claim is in a particular Class and entitled to a distribution only to the extent that the Claim is an Allowed Claim in that Class. Under the Plan, a Claim or any portion thereof without duplication is "Allowed" (a) that has been listed by the Debtors in their Schedules, as such Schedules may be amended by the Debtors from time to time in accordance with Bankruptcy Rule 1009, as liquidated in amount and not disputed or contingent, and with respect to which no contrary proof of claim has been filed, (b) any Claim specifically allowed under the Plan, (c) any Claim which is not a Disputed Claim, or (d) any Claim the amount or existence of which, if disputed, (i) has been determined by a Final Order of a court of competent jurisdiction other than the Bankruptcy Court, or (ii) has been allowed by Final Order of the Bankruptcy Court; PROVIDED, HOWEVER, that any Claims allowed solely for the purpose of voting to accept the Plan pursuant to an order of the Bankruptcy Court will not be considered "Allowed Claims" hereunder. The treatment of, and consideration to be provided to, holders of Allowed Claims and Interests will be in full settlement, release and discharge of such Allowed Claims and Interests; PROVIDED, that such discharge will not affect the liability of any other entity on, or the property of any other entity encumbered to secure payment of, any such Claim or Interest, except as otherwise provided in the Plan; and PROVIDED, FURTHER, that such discharge will not affect the Reorganized Debtors' obligations under and pursuant to the Plan. The treatment of and consideration to be provided to Allowed 62 Claim and Interest holders in each Class will apply to all of the Cases. No Claim will entitle the holder thereof to a distribution of cash or securities or to other consideration pursuant to the Plan unless, and only to the extent that, such Claim is an Allowed Claim. Finally, Claims against more than one Debtor with respect to a single obligation, by reason of guaranty, joint or "control group" liability, or otherwise, will be deemed to be a single Claim in the Allowed amount of such obligation for purposes of voting, allowance, distribution and all other purposes under the Plan. 2. TREATMENT OF UNCLASSIFIED CLAIMS Pursuant to Section 1123(a)(1) of the Code, the Plan does not classify certain priority Claims. These unclassified Claims will be treated as follows: (a) ADMINISTRATIVE CLAIMS. Generally, Administrative Claims consist of the costs and expenses of administration of the Cases. Such costs and expenses include, but are not limited to, the cost of operating the business since the Petition Date, the outstanding unpaid fees and expenses of the Case Professionals and the payments necessary to cure pre-petition defaults or unexpired leases and executory contracts that will be assumed by the Debtors under the Plan. Additionally, the Plan contemplates the satisfaction in full of Administrative Claims. Pursuant to Section 6.4.(A) of the Plan, all applications for final compensation of professional persons employed by the Debtors or the Creditors' Committee pursuant to orders entered by the Bankruptcy Court and on account of services rendered prior to the Effective Date, and all other requests for payment of Administrative Claims (except for ordinary course trade debt and customer deposit and credits incurred in the ordinary course of business after the Petition Date) must be served on the Reorganized Debtors in accordance with the notice provisions of Section 9.10. of the Plan and filed with the Bankruptcy Court no later than 25 days after the Effective Date. Any such Claim that is not timely filed and served will be forever barred. Objections to any such application must be filed within 15 days after receipt thereof. The Reorganized Debtors will review all filed Administrative Claims, and object to such Claims, as they deem appropriate. Subject to the foregoing, and unless otherwise agreed by the holder of an Allowed Administrative Claim, each holder of an Allowed Administrative Claim will be paid in full in Cash: (a) at the sole option of the Debtors (before the Effective Date) or the Reorganized Debtors (on or after the Effective Date), (i) in the ordinary course of business as the Claim becomes due and owing, or (ii) on the Initial Distribution Date; or (b) on such other date as the Bankruptcy Court may order including, without limitation, in the case of professional persons employed by the Debtors or the Creditors' Committee who have filed applications for final compensation in accordance with Section 6.4.(A) of the Plan, the date on which orders approving amounts set forth in such applications are entered by the Bankruptcy Court. (b) PRIORITY TAX CLAIMS. A Priority Tax Claim is any Claim of the kind described in, and entitled to priority in payment under, Section 507(a)(8) of the Code, which, in general, includes unsecured claims of governmental units to the extent such claims are for income tax, property tax, withholding tax, certain kinds of 63 employment tax, excise tax, customs duties arising from the importation of merchandise or a penalty related to the above types of claims and in compensation for actual loss. The aggregate estimated amount of Priority Tax Claims is $5 - $6 million. Section 2.3. of the Plan provides that, unless otherwise agreed by the holder of an Allowed Priority Tax Claim (in which event such other agreement will govern), each holder of an Allowed Priority Tax Claim will receive, at the sole option of the Debtors, on the Initial Distribution Date either: (i) Cash equal to the amount of such Allowed Priority Tax Claim; or (ii) Cash in six equal annual installments, together with interest thereon at the legal rate required for such claims in chapter 11 cases, which interest will be paid annually in arrears pursuant to Section 1129(a)(9)(C) of the Code. (c) DIP FACILITY CLAIM. As more fully described in Section II.C.2. hereof, entitled "The Chapter 11 Cases - The DIP Facility," on July 31, 2003, the Bankruptcy Court granted final approval of the DIP Facility provided by the DIP Lenders. Pursuant to Section 2.4. of the Plan, all amounts outstanding under the DIP Facility will be paid in full in Cash on the Effective Date, or otherwise satisfied in a manner acceptable to the DIP Lenders. (d) POST-PETITION TRADE LIEN CLAIMS. As more fully described in Section II.C.6. hereof, entitled "The Chapter 11 Cases - The Trade Lien Program," on October 23, 2003, the Bankruptcy Court approved the Trade Lien Program. Pursuant to Section 2.5. of the Plan, unless otherwise agreed by the holder of an Allowed Trade Lien Claim (in which event such other agreement will govern), each holder of an Allowed Trade Lien Claim will be paid in full in Cash on the date on which, in the ordinary course of business, such Allowed Trade Lien Claim becomes due and owing. Upon the Effective Date, the Lien granted by the Trade Lien Program will be released. If the Reorganized Debtors implement a Post-Effective Date Trade Lien Program, then each holder of an Allowed Trade Lien Claim will also share PARI PASSU in any Post-Effective Date Trade Lien on the terms and conditions described in Section 5.17. of the Plan. (e) KZCS SUCCESS FEE. As more fully described in Section II.C.1. entitled "The Chapter 11 Cases - Overview of the Debtors' Operations in Chapter 11 - KZCS Engagement and Agreement," on September 26, 2003, the Bankruptcy Court approved the KZCS Agreement. Pursuant to Section 2.1.(C) of the Plan, the Reorganized Debtors will make the distributions set forth on Plan Schedule 1.63 in satisfaction of the KZCS Success Fee; PROVIDED, HOWEVER, that, in accordance with paragraph 9 of the KZCS Order, KZCS will make a request to the Bankruptcy Court for payment of the KZCS Success Fee on notice to the United States Trustee and all other parties entitled to receive notice. (f) PJSC REORGANIZATION FEE. As more fully described in Section II.C.1. entitled "The Chapter 11 Cases - Overview of the Debtors' Operations in Chapter 11 - PJSC Engagement and Agreement," on September 26, 2003, the Bankruptcy Court approved the PJSC Agreement. Subject to Sections 2.1.(D) and 6.4.(A) of the Plan, the Reorganized Debtors will make the distributions set forth on Plan Schedule 1.79 in satisfaction of the PJSC Reorganization Fee. 64 (g) DEMME SUCCESS BONUS. As more fully described in Section II.C.9. entitled "The Chapter 11 Cases - Management," in August 2003 the Debtors entered into an employment agreement with James A. Demme. Pursuant to Section 2.1.(E) of the Plan, the Reorganized Debtors will make the distributions set forth on Plan Schedule 1.35, in satisfaction of the Demme Success Bonus. (h) PBGC ALLOWED ADMINISTRATIVE CLAIM. As more fully described in Section II.C.14. entitled "PBGC Settlement" the Reorganized Debtors have reached a global settlement with the PBGC with regard to the PBGC Claims and related matters, which is subject to Bankruptcy Court approval pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure. Pursuant to the PBGC Settlement the Reorganized Debtors will make distributions on account of the PBGC Allowed Administrative Claim in four equal installments payable bi-annually commencing on the date which is six months following the Effective Date. Additionally, the PBGC Allowed Administrative Claim is secured pursuant to the terms of the Post-Effective Date Trade Lien Program, as described in Section II.C.6. 3. TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS The following is a summary of the manner in which Claims and Interests are classified and treated under the Plan, together with a description of the estimated amounts of Allowed Claims and Interests included in each such Class. The Allowed Claims in Class 1 and Class 2 are unimpaired under the Plan and Claims and Interests in Class 3, Class 4, Class 5 and Class 6 are impaired under the Plan. The Debtors believe that the treatment afforded all Classes of Claims and Interests under the Plan fully comports with the requirements of the Code and case law. (a) CLASS 1 - PRIORITY NON-TAX CLAIMS. o DESCRIPTION OF PRIORITY NON-TAX CLAIMS. Allowed Claims, if any, entitled to priority pursuant to Sections 507(a)(3), 507(a)(4) or 507(a)(6) of the Code are Priority Non-Tax Claims. Such Claims include claims for (a) wages, salaries or commissions earned within 90 days before the Petition Date up to $4,650.00 per individual or corporation and (b) contributions to employee benefit plans, such as pension or health or life insurance plans, arising from services rendered within 180 days prior to the Petition Date, subject to certain limits. o CLASSIFICATION SCHEME. Allowed Priority Non-Tax Claims are classified in Class 1. The Debtors believe that all liquidated Class 1 Claims already have been paid pursuant to orders entered by the Bankruptcy Court. SEE Section II.C.3. Therefore, the aggregate estimated amount of Allowed Class 1 Claims as of the Petition Date is $0. o TREATMENT. Unless otherwise agreed by the holder of an Allowed Priority Non-Tax Claim (in which event such agreement will 65 govern), each Allowed Class 1 Claim will be paid in full in Cash on the later of the Initial Distribution Date and a date that is soon as practicable after the date upon which such Claim becomes an Allowed Priority Non-Tax Claim. (b) CLASS 2 - OTHER SECURED CLAIMS. o DESCRIPTION OF OTHER SECURED CLAIMS. Other Secured Claims are Secured Claims not classified in other Classes under the Plan, and might include, for example, claims for the delivery of goods or services to the Debtors to the extent of any cash deposit made by the Debtors before, and remaining unapplied on, the Petition Date. o CLASSIFICATION SCHEME. Allowed Other Secured Claims are classified in Class 2. o TREATMENT. At the Debtors' sole option, Other Secured Claims (if any) will be: (a) paid in Cash on the Initial Distribution Date; (b) reinstated according to the terms of the relevant instrument; (c) paid on such other terms as the Debtors and the holder of such Claim may agree; or (d) satisfied through the surrender by the applicable Debtors of the collateral securing the Claim to the Holder thereof. Each of the Blairsville Property Claim and the Clarion Property Claim will be Allowed Class 2 "Other Secured Claims" under the Plan. Notwithstanding anything contained in the Plan to the contrary, pursuant to and in accordance with the terms of Section 1124(2) of the Bankruptcy Code, the Blairsville Property Mortgage Documents and the Clarion Property Mortgage Documents will be reinstated and reaffirmed in accordance with their terms as provided in Section 2.7.(C)(ii) of the Plan, and such agreements will continue in full force and effect following the Effective Date. (c) CLASS 3 - UNSECURED CLAIMS. o DESCRIPTION OF UNSECURED CLAIMS. All Unsecured Claims, including, without limitation, the PBGC Allowed Unsecured Claim and the Senior Note Allowed Claim, trade claims and claims arising from rejection of executory contracts and leases of nonresidential real property, constitute the Unsecured Claims. o CLASSIFICATION SCHEME. All Allowed Unsecured Claims are classified in Class 3. The aggregate estimated amount of the Allowed Class 3 Claims is between $295 million and $305 million. o TREATMENT. Each holder of an Allowed Unsecured Claim will receive (i) its PRO RATA share of 100% of the New Penn Traffic Common Shares issued and distributed pursuant to Sections 5.9. and 6.2. of the Plan subject to (a) dilution resulting from the issuance of additional New Penn Traffic Common Shares upon the 66 exercise of options to purchase New Penn Traffic Common Shares granted to management of Reorganized Penn Traffic pursuant to the Management Stock Incentive Program and (b) such adjustments to the total issued New Penn Traffic Common Shares as may occur pursuant to Section 6.3.(A) of the Plan, and (ii) its PRO RATA share of all Trust Recoveries, if any. (d) CLASS 4 - CONVENIENCE CLAIMS. o DESCRIPTION OF CONVENIENCE CLAIMS. Means any Allowed Unsecured Claim against any Debtor, including Claims of beneficial holders of Senior Notes, that is either (i) equal to or less than $5,000.00, or (ii) reduced to $5,000.00 pursuant to an election made on the Ballot by the holder of such Unsecured Claim, and, therefore, is included in Class 4 under the Plan. o CLASSIFICATION SCHEME. Convenience Claims are classified in Class 4 and Allowed under the Plan. The aggregate estimated amount of the Allowed Class 4 Claims is $3.0 million. o TREATMENT. Each holder of an Allowed Convenience Claim will receive Cash equal to 15% of its Allowed Claim against the Debtors; PROVIDED, HOWEVER, that a holder of more than one Allowed Convenience Claim, which Claims in the aggregate exceed $5,000.00, may elect to be treated with respect to and in the amount of such aggregated Claim, as a Class 3 Claimholder for distribution purposes only. (e) CLASS 5 - INTERCOMPANY CLAIMS. o DESCRIPTION OF INTERCOMPANY CLAIMS. Intercompany Claims consist of Claims by a Debtor or an affiliate of a Debtor against a Debtor or an affiliate of a Debtor. o CLASSIFICATION SCHEME. Intercompany Claims against any Debtor are classified in Class 5. o TREATMENT. Subject to 5.10. of the Plan, Intercompany Claims will be discharged, and the holders of Intercompany Claims will not be entitled to receive or retain any property on account of such Claims. Section 5.10. of the Plan provides that prior to the discharge of Intercompany Claims, the Debtors have the right to retain, or effect such transfers and setoffs with respect to, Intercompany Claims as they may deem appropriate for accounting, tax and commercial business purposes, to the fullest extent permitted by applicable law. 67 (f) CLASS 6 - COMMON STOCK CLAIMS AND INTERESTS. o DESCRIPTION OF COMMON STOCK CLAIMS AND INTERESTS. Class 6 Common Stock Claims and Interests include: (i) all rights (including Claims) arising from the ownership of the common stock of Penn Traffic and its subsidiaries, (ii) all options, warrants, conversion, privilege or other legal or contractual rights to purchase the common stock of Penn Traffic, (iii) all rights associated with such common stock. o CLASSIFICATION SCHEME. Common Stock Claims and Interests are classified in Class 6. o TREATMENT. Common Stock Interests in Class 6 will be canceled, and the holders of Claims and Interests in Class 6 will not be entitled to receive or retain any property on account of their Claims and Interests. E. CONDITIONS TO EFFECTIVE DATE Pursuant to Article IV of the Plan, the following are conditions to the occurrence of the Effective Date, each of which must be satisfied or waived in accordance with Section 4.2. of the Plan: (i) the Reorganized Debtors have entered into definitive documentation with respect to the Exit Financing Facility and the Sale Leaseback Transaction, in each case, which is reasonably satisfactory to the Creditors' Committee, and all conditions precedent under the Exit Financing Facility and Sale Leaseback Transaction have been satisfied (but for the occurrence of the Effective Date); (ii) the Confirmation Order must have become a Final Order; (iii) the Amended Certificates of Incorporation must have been properly filed with the appropriate Secretaries of State; (iv) all authorizations, consents and regulatory approvals required (if any) for the Plan's effectiveness have been obtained; (v) the Cash Balance Pension Plan has been terminated pursuant to relevant provisions of ERISA; (vi) the Bankruptcy Court will have entered a Final Order approving the PBGC Settlement, and (vii) the Reorganized Debtors have entered into the Trust Agreement. F. EXECUTORY CONTRACTS AND UNEXPIRED LEASES 1. GENERAL The Code gives a debtor the power, subject to the approval of the bankruptcy court, to assume or reject executory contracts and unexpired leases. Generally, an "executory contract" is a contract under which material performance (other than the payment of money) still is due by each party. Rejection or assumption of executory contracts and unexpired leases may be effected pursuant to a plan of reorganization or with approval of the bankruptcy court after notice and a hearing. If an executory contract or unexpired lease is rejected, the other party to the agreement may file a claim for damages incurred as a result of the rejection within the time provided in the plan or otherwise by the Federal Rules of Bankruptcy Procedure (the "BANKRUPTCY 68 RULES") or the bankruptcy court. Damages arising from the rejection of certain employment agreements and leases of real property may be limited under the Code. In general, in the case of assumption of an executory contract or unexpired lease, the Code requires that the debtor promptly cure or provide adequate assurance that it promptly will cure any existing defaults (other than certain types of non-monetary defaults, such as defaults based on bankruptcy or the debtor's financial condition) and provide adequate assurance of future performance. As more fully described in Section II.C.11. entitled "The Chapter 11 Cases - Assumption and Rejection of Executory Contracts and Unexpired Leases," pursuant to various court orders the Debtors negotiated and rejected 86 of their unexpired retail store leases. Additionally, during the pendency of the Cases, the Bankruptcy Court has authorized the Debtors' rejection of certain other executory contracts and unexpired leases. 2. ASSUMPTION AND REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES Pursuant to Section 3.1. of the Plan, each executory contract and unexpired lease to which any of the Debtors is a party will be deemed automatically rejected as of the Effective Date, UNLESS such executory contract or unexpired lease (a) will have been previously rejected or assumed as of the Effective Date by order of the Bankruptcy Court or (b) is the subject of a motion to assume or reject filed on or before the Confirmation Date or (c) is listed on the schedule of contracts and leases to be rejected or assumed as of the Effective Date pursuant to the Plan, annexed as Plan Schedules 3.1 and Schedule 3.2, respectively (and as the same may be modified or supplemented, if at all, pursuant to Section 3.3.(B) of the Plan). The Confirmation Order will constitute an order of the Bankruptcy Court approving such deemed rejection as of the Effective Date. All executory contracts and unexpired leases specifically listed on the schedule of rejected executory contracts and unexpired leases, annexed as Plan Schedule 3.1, will be deemed automatically rejected pursuant to the Plan by the applicable Debtor as of the Effective Date. All executory contracts and unexpired leases specifically listed on the schedule of assumed executory contracts and unexpired leases, which will be filed 20 days prior to the Voting Deadline as Plan Schedule 3.2 as modified or supplemented, if at all, pursuant to Section 3.3.(B) of the Plan, will be deemed automatically assumed pursuant to the Plan by the applicable Debtor as of the Effective Date. Each executory contract and unexpired lease that is assumed under the Plan and relates to the use, ability to acquire or occupancy of real property will include (a) all modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affect such executory contract or unexpired lease and (b) all executory contracts or unexpired leases appurtenant to the premises, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, reciprocal easement agreements and any other interests in real estate or rights in rem related to such premises, unless any 69 of the foregoing agreements has been rejected pursuant to a Final Order of the Bankruptcy Court or is otherwise rejected as part of the Plan. Pursuant to Section 3.3. of the Plan, the Debtors reserve the right to file a motion on or before the Confirmation Date to assume or reject any executory contract or unexpired lease. Notwithstanding any other provision of the Plan, each of the Debtors retains the right, at any time prior to the Confirmation Hearing, to modify or supplement Plan Schedule 3.1 and Plan Schedule 3.2, including, without limitation, the right to add any executory contract or unexpired lease to, or delete any executory contract or unexpired lease from, Plan Schedule 3.1 or Plan Schedule 3.2. The Debtors will promptly provide notice of any amendment, modification or supplement to Plan Schedules 3.1 and 3.2 to the Creditors' Committee, the DIP Lenders and the affected non-debtor party to the executory contract or unexpired lease. Listing an executory contract or unexpired lease on Plan Schedule 3.1 or Plan Schedule 3.2 does not constitute an admission by any of the Debtors or the Reorganized Debtors that such contract or lease (including any related agreements that may exist) is an executory contract or unexpired lease or that the applicable Debtor or Reorganized Debtor has any liability thereunder. 3. PAYMENTS RELATED TO ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES Section 3.4. of the Plan provides that any monetary amounts by which each executory contract and unexpired lease to be assumed under the Plan may be in default will be satisfied by Cure in the amount, if any, set forth in Plan Schedule 3.2, or, in the event of an objection to such Cure amount, in the amount agreed between the parties or as ordered by the Bankruptcy Court. Objections, if any, to a Cure Amount set forth on Plan Schedule 3.2 will be filed by the non-debtor party to the unexpired lease or executory contract with the Bankruptcy Court on or before the Voting Deadline. If the non-debtor party to the unexpired lease or executory contract does not file an objection with the Bankruptcy Court to the amount of Cure set forth in Plan Schedule 3.2 on or before the Voting Deadline, or if notified of the assumption after the Voting Deadline, within ten days of such notice, such non-debtor party will be deemed to accept such Cure amount. In the event of a dispute regarding (a) the nature or the amount of any Cure, (b) the ability of the applicable Reorganized debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of Section 365 of the Code) under the contract or lease to be assumed or (c) any other matter pertaining to assumption, such dispute will be determined by the Bankruptcy Court, or as the parties may otherwise agree. To the extent that the Debtor which is a party to the unexpired lease or executory contract is to be merged pursuant to Section 5.4. of the Plan, upon assumption as contemplated herein, the Reorganized Debtor that is the surviving entity after such merger will be the party to the unexpired lease or executory contract. 70 4. POST-PETITION CONTRACTS AND LEASES Pursuant to Section 3.5. of the Plan, all contracts, agreements and leases that were entered into by the Debtors or assumed by the Debtors after the Petition Date will be deemed assigned by the Debtors to the Reorganized Debtors on the Effective Date. 5. REJECTION DAMAGES BAR DATE Section 3.6. of the Plan provides that if the rejection by a Debtor, pursuant to the Plan or otherwise, of an executory contract or unexpired lease results in a Claim, then such Claim will be forever barred and will not be enforceable against any Debtor or Reorganized Debtor or the properties of any of them unless a proof of claim is filed with the clerk of the Bankruptcy Court and served upon counsel to the Debtors within 30 days after service of the earlier of (a) notice of the Confirmation Date or (b) other notice that the executory contract or unexpired lease has been rejected pursuant to an order of the Bankruptcy Court. G. IMPLEMENTATION OF THE PLAN 1. PRE-EFFECTIVE DATE MANAGEMENT AND OPERATION OF DEBTORS Pursuant to Section 5.1. of the Plan, after the Confirmation Date and until the Effective Date, the current directors and officers of each Debtor will continue to serve in such capacities, subject to such changes as may be determined by the Board of Directors of a Debtor in accordance with the current Bylaws and Certificate of Incorporation of such Debtor (or comparable organizational documents). 2. POST-EFFECTIVE DATE COMMITTEE; DISSOLUTION OF COMMITTEE Pursuant to Section 5.2. of the Plan, the Creditors' Committee will continue to exist after the Confirmation Date until the Effective Date with the same power and authority, and the same ability to retain and compensate professionals, as it had prior to the Confirmation Date. On and as of the Effective Date, the Creditors' Committee will be reconstituted and will be comprised of no more than three (3) members of the Creditors' Committee (which may include EX OFFICIO members) prior to the Effective Date (the "POST-EFFECTIVE DATE COMMITTEE"). The members of the Creditors' Committee who are not members of the Post-Effective Date Committee will be released and discharged of and from all further authority, duties, responsibilities, and obligations related to and arising from and in connection with the Cases. In the event of the death or resignation of any member of the Post-Effective Date Committee after the Effective Date, the remaining members of the Post-Effective Date Committee will have the right to designate a successor from among the holders of Allowed Class 3 Claims. If a Post-Effective Date Committee member assigns its Claim or releases the Debtors from payment of all or the balance of its Claim, such act will constitute a resignation from the Post-Effective Date Committee. Until a vacancy on the Post-Effective Date Committee is filled, the Post-Effective Date Committee will function in its reduced number. The 71 Reorganized Debtors will consult with the Post-Effective Date Committee on a regular basis concerning the Reorganized Debtors' investigation, prosecution and proposed settlement of Class 3 Claims and will provide written reports to the Post-Effective Date Committee on a monthly basis regarding the status of the Claims resolution process. The Reorganized Debtors will not settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000.00 without either the approval of the Post-Effective Date Committee (which will act by majority vote) or an order of the Bankruptcy Court. Subject to the approval of the Post-Effective Date Committee, the Reorganized Debtors may settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000.00 without an order of the Bankruptcy Court. The Reorganized Debtors may settle or compromise any Class 3 Claim for less than the Allowed amount of $25,000.00 and without an order of the Bankruptcy Court and without the approval of the Post-Effective Date Committee. The duties of the Post-Effective Date Committee will also include services related to any applications for allowance of compensation or reimbursement of expenses pending on the Effective Date or filed after the Effective Date (collectively, the "FILED FEE APPLICATIONS"). The Reorganized Debtors will pay (a) the reasonable expenses of the members of the Creditors' Committee between the Confirmation Date and the Effective Date and the Post-Effective Date Committee (the "POST-EFFECTIVE DATE COMMITTEE EXPENSES") and (b) the fees of the professional persons employed by the Post-Effective Date Committee in connection with its duties and responsibilities as set forth in the Plan (the "POST-EFFECTIVE DATE COMMITTEE FEES") and the Post-Effective Date Committee will have the right to be heard on all issues relating to the Filed Fee Applications. The Post-Effective Date Committee Fees and the Post-Effective Date Committee Expenses will be paid within ten Business Days after submission of a detailed invoice to the Reorganized Debtors. If the Reorganized Debtors dispute the reasonableness of any such invoice, the Reorganized Debtors, the Post-Effective Date Committee or the affected professional may submit such dispute to the Bankruptcy Court for a determination of the reasonableness of such invoice, and the disputed portion of such invoice will not be paid until the dispute is resolved. The undisputed portion of such fees and expenses will be paid as provided herein. The Post-Effective Date Committee will be dissolved and the members thereof will be released and discharged of and from further authority, duties, responsibilities and obligations relating to and arising from and in connection with the Cases on the later of (i) the Final Distribution Date and (ii) the date all services related to Filed Fee Applications are completed and the retention or employment of the Post-Effective Date Committee's attorneys, accountants and other agents, will terminate. 72 3. MERGER OF CERTAIN DEBTORS Pursuant to Section 5.4. of the Plan, effective as of the Effective Date but immediately prior to the discharge of the Debtors described in Section 8.2. of the Plan, each of Dairy Dell, Inc., Bradford Supermarkets, Inc., Abbott Realty Corporation and Big Bear Distribution Company will be merged with and into Penn Traffic and Penn Traffic will be the surviving corporation in such merger. Except as otherwise set forth in the Plan, or as modified by appropriate corporate action after the Effective Date, the corporate structure and equity ownership of the Debtors and their subsidiaries will be unchanged. 4. AMENDED CERTIFICATES OF INCORPORATION AND AMENDED BYLAWS Pursuant to Section 5.5. of the Plan, as of the Effective Date, the certificates of incorporation and bylaws of each of the Debtors (or comparable organizational documents) will be amended as necessary to satisfy the provisions of the Plan and the Code, including, without limitation, the prohibition against the issuance of non-voting equity securities set forth in Section 1123(a)(6) of the Code (respectively, the "AMENDED CERTIFICATES OF INCORPORATION" and the "AMENDED BYLAWS"). The forms of Amended Certificates of Incorporation and Amended Bylaws, to be filed on or before the Exhibit Filing Date as Exhibits 1 and 2 to the Plan, will become effective on the Effective Date. After the Effective Date, the Amended Certificates of Incorporation and Amended Bylaws will be subject to such further amendments or modifications as may be made by law, or pursuant to such Amended Certificates of Incorporation and Amended Bylaws. 5. POST-EFFECTIVE DATE MANAGEMENT AND OPERATION OF REORGANIZED DEBTORS Pursuant to Section 5.6. of the Plan, as of the Effective Date, the directors and officers of each Debtor that is not a Reorganized Debtor will be terminated. The Debtors will file Plan Schedule 5.6 with the Bankruptcy Court on or before the Exhibit Filing Date setting forth the offices, the names and affiliations of, and the compensation proposed to be paid to, the individuals intended to serve as directors and officers of each Reorganized Debtor on and after the Effective Date. The initial board of directors of Reorganized Penn Traffic will consist of seven members, four of which will be selected by the Committee, two of which will be designated by the holders of a majority of the Senior Notes and one of which will be Robert J. Chapman. On and after the Effective Date, each Reorganized Debtor will be governed in accordance with the Amended Certificates of Incorporation and Amended Bylaws. 6. REPAYMENT OF DIP FACILITY/EXIT FINANCING/ SALE-LEASEBACK TRANSACTION In order to consummate the Plan, the Reorganized Debtors anticipate entering into (a) a credit facility (the "EXIT CREDIT FACILITY") which will close on the Effective Date and (b) a sale-leaseback transaction with respect to five of its owned distribution centers which will close on the Effective Date, in order to obtain the working 73 capital and cash necessary to satisfy in full the Debtors' obligations under the DIP Facility, to make other payments required to be made under the Plan on the Effective Date and to fund their operations going forward. In the Confirmation Order, the Bankruptcy Court will (i) authorize the Debtors to take such actions and to perform such acts as may be necessary or appropriate in connection with the repayment and termination of the DIP Facility, including, without limitation, the cash collateralization or return of all letters of credit issued thereunder on the Effective Date and in a manner satisfactory to the Agent and the DIP Lenders and (ii) provide for the continuation of the liens and priorities granted to the Agent and the DIP Lenders under the DIP Facility and the DIP Approval Orders until the Effective Date. (a) EXIT FINANCING The Exit Credit Facility is likely to be secured by all or substantially all of the assets and properties of the Reorganized Debtors which are not included in the sale-leaseback transactions discussed below, and may include both a revolving as well as a term facility. Negotiations with respect to such an Exit Credit Facility are on-going, and the Debtors intend to file with the Bankruptcy Court as Plan Schedule 5.7, a substantially final draft of a definitive loan agreement, or a commitment letter with respect thereto, no later than the Exhibit Filing Date. In the Confirmation Order, the Bankruptcy Court will approve the Exit Credit Facility in substantially the form filed with the Bankruptcy Court and authorize the Debtors to execute the same together with such other documents and instruments related thereto. On or about January 18, 2005, the Bankruptcy Court entered an order approving the Debtors' entry into a commitment letter and related fee letter (the "COMMITMENT LETTERS"), with General Electric Capital Corporation ("GE CAPITAL") and Kimco Realty Corporation ("KIMCO"), as agents and lenders with respect to an exit financing facility including (i) a senior secured revolving credit facility in an amount not to exceed $145 million, (ii) a senior secured term loan in an amount not to exceed $6 million and (iii) a supplemental real estate facility in an amount not to exceed $28 million. Pursuant to the terms of the Commitment Letters, the Debtors made the following pre-closing payments and deposits to the Agents (the "FEES AND DEPOSITS"): (i) a revolver commitment fee in the amount of $300,000 payable to GE Capital; (ii) a term loan commitment fee in the amount of $20,000 payable to GE Capital; (iii) a supplemental real estate facility commitment fee in the amount of $100,000 payable to Kimco; and (iv) deposits (the "EXPENSE DEPOSITS") towards transaction expenses in the amount of $150,000 and $100,000 payable to GE Capital and Kimco, respectively. In addition, the Debtors have agreed to pay certain costs and expenses incurred by the Agents with respect to the proposed financing and to replenish the Expense Deposits from time to time in accordance with the terms of the Commitment Letters. (b) SALE-LEASEBACK TRANSACTION In connection with Penn Traffic's exit from chapter 11, and as a condition to the effectiveness of the Plan, Penn Traffic will enter into a sale-leaseback transaction with respect to its distribution centers. 74 On December 22, 2004, Penn Traffic entered into an Agreement for Sale and Leaseback with Equity Industrial Partners Corp. pursuant to which Penn Traffic will sell five of its owned distribution centers located in New York and Pennsylvania to Equity Industrial Partners Corp. or its designee for a purchase price of thirty-seven million dollars ($37,000,000.00) and Equity Industrial Partners Corp. will lease back to Penn Traffic for an initial term of fifteen (15) years with four (4) consecutive five (5) year options to renew the lease (except that the lease term will end no later than the fourteenth (14th) anniversary of the expiration of the initial term with respect to the Pennsylvania distribution centers). The lease will be a net lease, with an initial base rent of $4,130,200.00 per year. A copy of the Agreement for Sale and Leaseback with Equity Industrial Partners, Corp. will be filed with the Bankruptcy Court as Plan Schedule 5.8 no later than the Exhibit Filing Date. In the Confirmation Order, the Bankruptcy Court will approve Penn Traffic's entry into the Agreement for Sale and Leaseback with Equity Industrial Partners, Corp. and authorize Penn Traffic to consummate the transactions contemplated therein. 7. ISSUANCE OF NEW PENN TRAFFIC COMMON SHARES Section 5.9. of the Plan provides that, on the Initial Distribution Date, each Interim Distribution Date and the Final Distribution Date, as applicable, Reorganized Penn Traffic will issue the New Penn Traffic Common Shares for distribution to holders of Allowed Claims in accordance with the Plan. The issuance of the New Penn Traffic Common Shares and the distribution thereof in accordance with the Plan will be exempt from registration under applicable securities laws (including without limitation, Section 5 of the Securities Act or any similar state or local law requiring the registration for offer or sale of a security or registration or licensing of an issuer of a security) pursuant to Section 1145(a) of the Code, and may be sold without registration to the extent permitted under Section 1145 of the Code. 8. MANAGEMENT STOCK INCENTIVE PROGRAM Pursuant to Section 5.11. of the Plan, as soon as practicable after the Effective Date, the Management Stock Incentive Program will be adopted by the Board of Directors of Reorganized Penn Traffic. The Management Stock Incentive Program is a stock incentive plan pursuant to which, among other provisions, the Reorganized Debtors will reserve New Penn Traffic Common Shares for award to certain members of management of the Reorganized Debtors at such times and in a manner to be determined in the sole discretion of the Board of Directors of Reorganized Penn Traffic, such reserved shares to not exceed 10%, on a fully diluted basis, of the aggregate amount of New Penn Traffic Common Shares distributable under Section 6.2. of the Plan. 9. CONTINUATION OF PENN TRAFFIC'S PENSION PLANS Pursuant to Section 5.14. of the Plan, other than the Debtors' Cash Balance Pension Plan, termination of which is a condition precedent to the effectiveness of the Plan pursuant to Section 4.1.(v) thereof, the Reorganized Debtors will continue to sponsor, administer and maintain the Other Debtor Pension Plans upon the occurrence of 75 the Effective Date, including meeting the minimum funding standards under ERISA and the Internal Revenue Code, paying all PBGC insurance premiums, and administering and operating the Other Debtor Pension Plans in accordance with their terms and ERISA. Nothing in the Plan will be deemed to discharge, release, or relieve any Person, in any capacity, from any current or future liability, if any, for breaches of fiduciary duty under ERISA with respect to the Cash Balance Pension Plan and the Other Debtor Pension Plans, and PBGC and such Pension Plans will not be enjoined or precluded from enforcing such liability as a result of the Plan's provisions or confirmation. Notwithstanding the foregoing, after the Effective Date, the Reorganized Debtors will have the right and authority to terminate, amend or freeze the Other Debtor Pension Plans in accordance with their terms, ERISA and the Internal Revenue Code, and other applicable law. 10. EMPLOYMENT, RETIREMENT, AND INCENTIVE COMPENSATION PLANS AND PROGRAMS Section 5.15. of the Plan provides that all employment and severance agreements and policies, and all employee compensation and benefit plans, policies, and programs of the Debtors applicable generally to its employees, including agreements and programs subject to Section 1114 of the Bankruptcy Code, as in effect on the Effective Date, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, life, accidental death, and dismemberment insurance plans, and workers' compensation programs, but not including the Other Debtor Pension Plans, will be deemed to be, and will be treated as though they are, executory contracts but only to the extent that rights under such agreements and programs are held by the Debtors or Persons who are the Reorganized Debtors' employees as of the Effective Date, and the Debtors' obligations under such agreements and programs to individuals who are employees of the Debtors on the Effective Date will survive the Effective Date of the Plan, without prejudice to the Reorganized Debtors' rights under applicable non-bankruptcy law to modify, amend, or terminate the foregoing arrangements, except for (i) such executory contracts or plans deemed rejected pursuant to the Plan (to the extent such rejection does not violate Section 1114 of the Bankruptcy Code) and (ii) such executory contracts or plans as have previously been terminated, or rejected, pursuant to a Final Order, or specifically waived by the beneficiaries of such plans, contracts, or programs. 11. POST-EFFECTIVE DATE TRADE LIEN PROGRAM; CREDITOR SUBORDINATION PROVISION The Debtors are considering implementing a trade lien program for the benefit of certain vendors who provide inventory and other trade support on credit to the Reorganized Debtors from time to time on and after the Effective Date as well as to the holders of any Allowed Trade Lien Claims (the "POST-EFFECTIVE DATE TRADE LIEN PROGRAM"). The terms and conditions of such Post-Effective Date Trade Lien Program, if any, will be set forth on Plan Schedule 5.17 to be filed with the Bankruptcy Court on or before the Exhibit Filing Date. Any Post-Effective Date Trade Lien granted in 76 connection with the Post-Effective Date Trade Lien Program and any obligations due and owing in respect thereof will be junior and subordinate in all respects to the Exit Financing Facility and any liens granted in connection therewith. In addition, except as otherwise provided in the Post-Effective Date Trade Lien Program and as more fully described therein, each Person entitled to receive a distribution under the Plan that becomes a creditor or equity security holder of the Debtors or Reorganized Debtors, will be deemed to contractually subordinate any present or future claim, right, or other interest it may have in and to property of the Reorganized Debtors, to claims of the vendors secured by any Post-Effective Date Trade Lien; PROVIDED, HOWEVER, that in no case will the lenders under the Exit Financing Facility be deemed subordinated in this regard. Such contractual subordination will terminate upon termination or expiration of any Post-Effective Date Trade Lien. 12. EXEMPTION FROM CERTAIN TRANSFER AND OTHER TAXES. Section 5.13 of the Plan provides that pursuant to Section 1146 of the Code, (a) the issuance, transfer or exchange of any securities, instruments or documents, (b) the creation of any Lien, mortgage, deed of trust or other security interest, including with respect to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program (c) the making or assignment of any lease or sublease or the making or delivery of any deed or other instrument of transfer under, pursuant to, in furtherance of, or in connection with the Plan, including, without limitation, any deeds, bills of sale or assignments executed in connection with any of the transactions contemplated under the Plan or the reinvesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated in the Plan and (d) the issuance, renewal, modification or securing of indebtedness by such means including with respect to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program, and the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including, without limitation, the Confirmation Order, the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale Leaseback Transaction and the Post-Effective Date Trade Lien Program, will not be subject to any document recording tax, stamp tax, conveyance fee or other similar tax, mortgage tax, real estate transfer tax, mortgage recording tax or other similar tax or governmental assessment. Consistent with the foregoing, each recorder of deeds or similar official for any county, city or governmental unit in which any instrument hereunder is to be recorded will, pursuant to the Confirmation Order, be ordered and directed to accept any such instruments or documents without requiring the payment of any filing fees, documentary stamp tax, deed stamps, stamp tax, transfer tax, intangible tax or similar tax. 77 13. THE PENN TRAFFIC CREDITOR TRUST14. Pursuant to Section 7.3. of the Plan, without any further action of the directors or shareholders of the Debtors, on the Effective Date, the Trust Agreement, substantially in the form of Exhibit 3 to the Plan, will become effective. The Trustee will accept the Penn Traffic Creditor Trust and sign the Trust Agreement on the Effective Date and the Penn Traffic Creditor Trust will then be deemed created and effective. Interests in the Penn Traffic Creditor Trust will be uncertificated and will be non- transferable except upon death of the interest holder or by operation of law. Holders of interests in the Penn Traffic Creditor Trust will have no voting rights with respect to such interests. Unless the Trustee asserts an insurance claim in writing, or commences an action or a proceeding asserting a Trust Claim, within three (3) years from the Effective Date, in which case the Trust will continue until such claim is resolved or such action or proceeding is concluded, the Penn Traffic Creditor Trust will have a term of three (3) years from the Effective Date, without prejudice to the rights of the Trust Advisory Board to seek Bankruptcy Court approval to extend such term conditioned upon the Penn Traffic Creditor Trust's not then becoming subject to the Exchange Act (the "TRUST TERM"). The terms of the Trust may be amended by the Trustee or the Reorganized Debtors to the extent necessary to ensure that the Trust will not become subject to the Exchange Act. The Trustee will have full authority to take any steps necessary to administer the Trust Agreement, including, without limitation, the duty and obligation to liquidate Trust Assets, to make distributions therefrom in accordance with the provisions of the Plan and, if authorized by majority vote of those members of the Trust Advisory Board authorized to vote, to pursue and settle any Trust Claims. Upon such assignment, the Trustee, on behalf of the Penn Traffic Creditor Trust, will assume and be responsible for any responsibilities, duties, and obligations of the Debtors with respect to the subject matter of the assignments, and the Debtors, the Disbursing Agent, and the Reorganized Debtors will have no further rights or obligations with respect thereto. All costs and expenses associated with the administration of the Penn Traffic Creditor Trust, including those rights, obligations and duties described in the Plan, will be the responsibility of and paid by the Penn Traffic Creditor Trust. Notwithstanding the preceding sentence, the Reorganized Debtors will contribute the following to the Penn Traffic Creditor Trust to be utilized to pay the costs and expenses associated with the administration of the Penn Traffic Creditor Trust (the "FUNDING CONTRIBUTIONS"): (i) $300,000.00 on the Effective Date and (ii) four (4) quarterly installments in the amount of $50,000.00 each to be paid by the Reorganized Debtors to the Penn Traffic Creditor Trust beginning on the three (3) month anniversary of the Effective Date ((i) and (ii) above, collectively, the "INITIAL INSTALLMENTS"). If the Reorganized Debtors fail to pay any of the Initial Installments within five (5) business days after written notice of the Trust to the Reorganized Debtors, all remaining Initial Installments will become immediately due and payable to the Penn Traffic Creditor Trust. The Trustee will have the right to seek an order of the Bankruptcy Court requiring 78 the Reorganized Debtors to make additional Funding Contributions in excess of the foregoing Initial Installments at any time during the Trust Term in the maximum aggregate amount of $500,000.00 in excess of the Initial Installments. As of the termination of the Penn Traffic Creditor Trust, any unused Funding Contributions will be disposed of at the discretion of the Trustee, as authorized by the Trust Advisory Board, by majority vote. The Trustee may retain such law firms, accounting firms, experts, advisors, consultants, investigators, appraisers, auctioneers or other professionals as it may deem necessary (collectively, the "TRUSTEE PROFESSIONALS"), in its sole discretion, to aid in the performance of its responsibilities pursuant to the terms of the Plan including, without limitation, the liquidation and distribution of Trust Assets. For federal income tax purposes, it is intended that the Penn Traffic Creditor Trust be classified as a liquidating trust under Section 301.7701 4 of the Procedure and Administration Regulations and as a grantor trust subject to the provisions of Subchapter J, Subpart E of the Internal Revenue Code of 1986, as amended, that is owned by its beneficiaries as grantors. Accordingly, for federal income tax purposes, it is intended that the beneficiaries be treated as if they had received a distribution of an undivided interest in the Trust Assets and then contributed such interests to the Penn Traffic Creditor Trust. The Trustee will be responsible for filing all federal, state and local tax returns for the Penn Traffic Creditor Trust if necessary. Additionally, pursuant to Section 7.4. of the Plan, a Trust Advisory Board will be established. The Trust Advisory Board will be comprised of three (3) members which will be designated by the Creditors' Committee. The Creditors' Committee will give the Debtors written notice of the identities of such members and file such notice with the Bankruptcy Court on a date that is not less than ten (10) days prior to the Confirmation Hearing; PROVIDED, HOWEVER, that if the Creditors' Committee fails to file and give such notice, Penn Traffic will designate the members of the Trust Advisory Board by announcing their identities at the Confirmation Hearing. The Trustee will consult regularly with the Trust Advisory Board when carrying out the purpose and intent of the Penn Traffic Creditor Trust. Members of the Trust Advisory Board will be entitled to reimbursement of the reasonable and necessary expenses incurred by them in carrying out the purpose of the Trust Advisory Board, which will be payable by the Penn Traffic Creditor Trust. In the case of an inability or unwillingness of any member of the Trust Advisory Board to serve, such member may be replaced by designation of the remaining members of the Trust Advisory Board. If any position on the Trust Advisory Board remains vacant for more than thirty (30) days, such vacancy will be filled within fifteen (15) days thereafter by the designation of the Trustee without the requirement of a vote by the other members of the Trust Advisory Board until a vacancy on the Trust Advisory Board is filled, the Trust Advisory Board will function in its reduced number. 79 Upon the certification by the Trustee that all Trust Assets have been distributed, abandoned or otherwise disposed of, the members of the Trust Advisory Board will resign their positions, whereupon they will be discharged from further duties and responsibilities. The Trust Advisory Board will, by majority vote, approve all settlements of Trust Claims which the Trustee or any member of the Trust Advisory Board may propose, PROVIDED, HOWEVER, that (i) no member of the Trust Advisory Board may cast a vote with respect to any Trust Claim to which it is a party; and (ii) the Trustee may seek Bankruptcy Court approval of a settlement of a Trust Claim if the Trust Advisory Board fails to act on a proposed settlement of such Trust Claim within thirty (30) days of receiving notice of such proposed settlement by the Trustee or as otherwise determined by the Trustee. The Trust Advisory Board may, by majority vote, authorize the Trustee to invest the corpus of the Trust in prudent investments other than those described in Section 345 of the Bankruptcy Code. The Trust Advisory Board may remove the Trustee in its discretion. In the event the requisite approval is not obtained, the Trustee may be removed by the Bankruptcy Court for cause shown. In the event of the resignation or removal of the Trustee, the Trust Advisory Board will, by majority vote, designate a person to serve as successor Trustee. The successor Trustee will file an affidavit demonstrating that such Person is disinterested as defined by Section 101(14) of the Bankruptcy Code. Notwithstanding anything to the contrary in the Plan, neither the Trust Advisory Board nor any of its members, designees, counsel, financial advisors or any duly designated agent or representatives of any such party will be liable for the act, default or misconduct of any other member of the Trust Advisory Board, nor will any member be liable for anything other than such member's own gross negligence or willful misconduct. The Trust Advisory Board may, in connection with the performance of its duties, and in its sole and absolute discretion, consult with its counsel, accountants or other professionals, and will not be liable for anything done or omitted or suffered to be done in accordance with such advice or opinions. If the Trust Advisory Board determines not to consult with its counsel, accountants or other professionals, it will not be deemed to impose any liability on the Trust Advisory Board, or its members and/or designees. The Trust Advisory Board will govern its proceedings through the adoption of bylaws, which the Trust Advisory Board will adopt by majority vote. No provision of such bylaws will supersede any express provision of the Plan or the Trust Agreement. Pursuant to Section 7.5. of the Plan, pro-rata distributions of the Trust Recoveries to holders of Allowed Unsecured Claims in accordance with their interests in the Penn Traffic Creditor Trust as set forth in the Plan may be made at least semi-annually beginning with a calendar quarter that is not later than the end of the second 80 calendar quarter after the Effective Date; PROVIDED, HOWEVER, that the Trustee will not be required to make any such semiannual distribution in the event that the aggregate proceeds and income available for distribution to such Claimholders is not sufficient, in the Trustee's discretion (after consultation with the Trust Advisory Board) to economically distribute monies, and in any case, in connection with any interim (as opposed to final) distribution, the Trustee will retain at least the amount of funds paid to the Penn Traffic Creditor Trust pursuant to Section 7.3.(D) of the Plan. The Trustee will make diligent and continuing efforts to prosecute or settle the Trust Claims, make timely distributions, and not unduly prolong the duration of the Penn Traffic Creditor Trust. For the purpose of calculating the amount of the Trust Recoveries to be distributed to holders of Allowed Class 3 Claims, all Disputed Claims in Class 3 will be treated as though such claims will be Allowed Claims in the Face Amount of such claims on the relevant distribution date. H. Distributions Under the Plan 1. DISTRIBUTIONS (a) DISBURSING AGENT. All distributions under the Plan will be made by the Reorganized Debtors or the Disbursing Agent or such other entity as may be designated by the Reorganized Debtors as a Disbursing Agent in consultation with the Post-Effective Date Committee, including the Senior Note Trustee. No Disbursing Agent, including the Senior Note Trustee, will be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court; and, in the event that the Disbursing Agent or the Senior Note Trustee is so otherwise ordered, all cost and expenses of procuring any such bond or surety will be borne by the Reorganized Debtors. The amount of any reasonable fees and expenses incurred by the Disbursing Agent and the Senior Note Trustee on or after the Effective Date (including, without limitation, taxes) and any reasonable compensation and expense reimbursement claims (including, without limitation, reasonable attorney fees and expenses) made by the Disbursing Agent and the Senior Note Trustee in making distributions under the Plan will be paid in Cash by the Reorganized Debtors. (b) CASH DISTRIBUTIONS. Except as otherwise provided in the Plan, all distributions to be made to the holders of Allowed Claims in Cash under the Plan will be made on or as soon as practicable after the Initial Distribution Date. (c) DISTRIBUTIONS TO HOLDERS OF ALLOWED CLASS 3 CLAIMS. Section 6.2. of the Plan provides that as soon as practicable on or after the Effective Date, Reorganized Penn Traffic will issue New Penn Traffic Common Shares, and will make available to the Disbursing Agent New Penn Traffic Common Shares, in a number sufficient to make distributions on behalf of the Debtors to holders of Allowed Class 3 Claims in accordance with Sections 2.8.(C) and 6.2.(C) and (F) of the Plan. Section 6.2. of the Plan also provides that, on any Interim Distribution Date and on the Final Distribution Date, as applicable, Reorganized Penn Traffic will issue New Penn Traffic Common Shares, and make available to the Disbursing Agent New Penn Traffic Common Shares, in a number sufficient to make distributions on behalf of the Debtors to 81 holders of Allowed Class 3 Claims in accordance with Sections 2.8.(C), 6.2.(D), (E) and (F) of the Plan. The Disbursing Agent will make distributions of New Penn Traffic Common Shares to holders of Allowed Class 3 Claims as follows: (i) As soon as practicable after the Effective Date, Reorganized Penn Traffic will cause the Disbursing Agent to send a notice and a transmittal form (which will specify that delivery will be effected and risk of loss and title to the Senior Notes will pass, except to the extent that the Senior Notes held by holders are evidenced by electronic entry, only upon delivery of the Senior Notes to the Senior Note Trustee, and will be in such form and have such other reasonable provisions as Reorganized Penn Traffic and the Senior Note Trustee may reasonably specify) to each holder of record of a Senior Note as of the Distribution Record Date advising such holder of the effectiveness of the Plan and the procedure for surrendering to the Senior Note Trustee such Senior Note in exchange for the New Penn Traffic Common Shares issuable to it pursuant to Section 2.8.(C) of the Plan. At the close of business on the Distribution Record Date, the transfer ledgers in respect of the Senior Notes will be closed, and there will be no further changes in the record holders of the Senior Notes. The Reorganized Debtors, the Disbursing Agent and the Senior Note Trustee will have no obligation to recognize any transfer of Senior Notes occurring after the Distribution Record Date. The Reorganized Debtors, the Disbursing Agent and the Senior Note Trustee will be entitled instead to recognize and deal for all purposes hereunder only with those record holders stated on the transfer ledgers as of the close of business on the Distribution Record Date. (ii) If a holder of a Senior Note is unable to surrender a Senior Note because it has been destroyed, lost or stolen, such holder may receive a distribution with respect to such Senior Note upon request to the Senior Note Trustee in an acceptable form with: (i) proof of such holder's title to such Senior Note; (ii) proof of the destruction or theft of such Senior Note, or an affidavit to the effect that the same has been lost and after diligent search cannot be found; and (iii) such indemnification as may reasonably be required by the Reorganized Debtors and the Senior Note Trustee to indemnify the Reorganized Debtors, the Disbursing Agent, the Senior Note Trustee, and all other persons deemed appropriate by the Senior Note Trustee and the Reorganized Debtors against any loss, action, suit or other claim whatsoever that may be made as a result of such holder's receipt of a distribution on account of such Senior Note under the Plan. Any holder that fails to comply with Section 6.2.(A) of the Plan before the first anniversary of the Effective Date will be deemed to have forfeited all rights and claims and may not participate in any distribution under the Plan. 82 (iii) As soon as practicable after the Effective Date, Reorganized Penn Traffic will cause the Disbursing Agent to send a notice to each holder of an Allowed Class 3 Claim and each holder of an Allowed Class 4 Claim advising such holder of the effectiveness of the Plan and requesting the completion and return of the Taxpayer Identification Request Form. The Class 3 or Class 4 distribution of any holder of an Allowed Class 3 Claim or an Allowed Class 4 Claim, as the case may be, who fails to return the Taxpayer Identification Request Form within 120 days following the mailing by the Disbursing Agent of the Taxpayer Identification Request Form will be automatically deemed Unclaimed Property pursuant to Section 6.3.(H) of the Plan at the expiration of such 120 day period without further order of the Bankruptcy Court. (iv) Subject to Section 6.2.(B) of the Plan, on the Initial Distribution Date, the Disbursing Agent will make a PRO RATA distribution (determined in accordance with Section 6.2.(F) of the Plan) of the New Penn Traffic Common Shares allocable to Allowed Claims held by holders of Class 3 Claims as of the Distribution Record Date. Distributions of the New Penn Traffic Common Shares on account of the Senior Note Allowed Claim will be made to the Senior Note Trustee. The Senior Note Trustee will, in turn, as soon as is practicable, make distributions to the holders of the Senior Notes pursuant to the terms of the Senior Note Indenture and the Plan so long as the holders are in compliance with Sections 6.2.(A) and (B) of the Plan. (v) Subject to Sections 6.2.(A) and (B) of the Plan, on any Interim Distribution Date, the Disbursing Agent will make PRO RATA distributions (determined in accordance with Section 6.2.(F) of the Plan) of New Penn Traffic Common Shares to holders of Allowed Class 3 Claims pursuant to and consistent with resolutions of Disputed Claims since the Initial Distribution Date, or the previous Interim Distribution Date, as the case may be. (vi) Subject to Sections 6.2.(A) and (B) of the Plan, on the Final Distribution Date, the Disbursing Agent will make a PRO RATA distribution (determined in accordance with Section 6.2.(F) of the Plan) of New Penn Traffic Common Shares to holders of Allowed Class 3 Claims pursuant to and consistent with resolutions of Disputed Claims since the Initial Distribution Date (if there have been no distributions since the Initial Distribution Date), or the previous Interim Distribution Date, as the case may be. (vii) As provided in Section 6.2.(F) of the Plan, the PRO RATA share of New Penn Traffic Common Shares distributable to any holder of an Allowed Class 3 Claim under Section 6.2.(C), 6.2.(D) or 6.2.(E) of the Plan will equal (i) 10,000,000 multiplied by (ii) a fraction, 83 the numerator of which is equal to such holder's Allowed Class 3 Claims as of the relevant distribution date under Section 6.2.(C), 6.2.(D) or 6.2.(E) of the Plan, as applicable, and the denominator of which is equal to 110% of the total amount of Allowed Class 3 Claims as of the Initial Distribution Date; PROVIDED, that for purposes of calculating such denominator, all Disputed Claims in Class 3 as of the Initial Distribution Date will be treated as though such Claims were Allowed Claims in the Face Amount of such Claims as of the Distribution Record Date, regardless of whether such Claims are subsequently disallowed in whole or in part. As described in Section 2.8.(C) of the Plan, each holder of an Allowed Unsecured Claim will receive its PRO RATA share of 100% of the New Penn Traffic Common Shares (subject to dilution and adjustments as described in such Section). As described in Section 6.2. of the Plan, distributions of those New Penn Traffic Common Shares will be made on the Initial Distribution Date, any Interim Distribution Date and on the Final Distribution Date. As a result, the PRO RATA share of New Penn Traffic Common Shares distributed to any holder of an Allowed Class 3 Claim that receives New Penn Traffic Common Shares distributed on the Initial Distribution Date or on any Interim Distribution Date will be subject to dilution as a result of the distribution of additional New Penn Traffic Common Shares on a subsequent Distribution Date. The following are examples illustrating the distribution formula set forth in Sections 6.2.(C), 6.2(D), 6.2(E) and (F) of the Plan. The examples also illustrate how the distribution of additional New Penn Traffic Common Shares would result in dilution of an Allowed Class 3 Claimholder's interest in Reorganized Penn Traffic: Assumptions: o Assume Creditor A has a $35,000,000 Allowed Class 3 Claim. o Assume 110% of the total amount of Allowed Class 3 Claims as of the Initial Distribution Date aggregates $350,000,000.(11) - --------------------------- (11) As provided in Section 6.2.(F) of the Plan, for purposes of calculating the total amount of Allowed Class 3 Claims, all Disputed Claims in Class 3 as of the Initial Distribution Date will be treated as though such Claims were Allowed Claims in the Face Amount of such Claims as of the Distribution Record Date, regardless of whether such Claims are subsequently disallowed in whole or in part. 84 EXAMPLE #1: - -------------------------------------------------------------------------------- o Assuming only $280,000,000 of Class 3 Claims are ACTUALLY Allowed as of the Initial Distribution Date, only 8,000,000 New Penn Traffic Common Shares would be issued based on the Section 6.2.(F) formula, as follows: - -------------------------------------------------------------------------------- 10,000,000 shares(12) x $280,000,000 = 8,000,000 shares ------------ outstanding $350,000,000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- o Under Example #1, Creditor A would get 1,000,000 New Penn Traffic Common Shares based on the Section 6.2.(F) formula, as follows: - -------------------------------------------------------------------------------- 10,000,000 shares x $ 35,000,000 = 1,000,000 shares ------------ $350,000,000 - -------------------------------------------------------------------------------- Creditor A has a 12.5% interest in the Company (1,000,000 of the 8,000,000 issued shares). - -------------------------------------------------------------------------------- EXAMPLE #2: - -------------------------------------------------------------------------------- o Assuming an additional $17,500,000 of claims are Allowed as of an Interim Distribution Date, Creditor A's percentage interest in Reorganized Penn Traffic would be reduced to 11.76% as a result of the issuance of additional shares, as follows: - -------------------------------------------------------------------------------- 10,000,000 shares x $297,500,000 = 8,500,000 shares ------------ outstanding $350,000,000 - -------------------------------------------------------------------------------- Under Example #2, Creditor A has a 11.76% interest in Reorganized Penn Traffic (1,000,000 out of the 8,500,000 issued shares). - -------------------------------------------------------------------------------- - ------------------- (12) The Section 6.2.(F) formula assumes that an aggregate of 10,000,000 New Penn Traffic Common Shares will be issued, which would be the case if approximately 110% of the total amount of Class 3 Claims were Allowed Claims, calculated in accordance with footnote 1. 85 EXAMPLE #3: - -------------------------------------------------------------------------------- o Assuming an additional $52,500,000 of claims are Allowed as of the Final Distribution Date, Creditor A's percentage interest in Reorganized Penn Traffic would be reduced to 10% as a result of the issuance of additional shares, which is what Creditor A would have had if all $350,000,000 in claims had been Allowed as of the Initial Distribution Date: - -------------------------------------------------------------------------------- 10,000,000 shares x $350,000,000 = 10,000,000 shares ------------ outstanding $350,000,000 - -------------------------------------------------------------------------------- Under Example #3, Creditor A has a 10% interest in Reorganized Penn Traffic (1,000,000 out of the 10,000,000 shares outstanding). - -------------------------------------------------------------------------------- EXAMPLE #4: - -------------------------------------------------------------------------------- o Alternatively, assuming only an additional $35,000,000 of claims are Allowed as of the Final Distribution Date, Creditor A's percentage interest in Reorganized Penn Traffic would be reduced to 10.53% as a result of the issuance of additional shares, which is what Creditor A would have had if only $332,500,000 of claims were actually Allowed as of the Initial Distribution Date: - -------------------------------------------------------------------------------- 10,000,000 shares x $332,500,000 = 9,500,000 shares ------------ outstanding $350,000,000 - -------------------------------------------------------------------------------- Under Example #4, Creditor A has an 10.53% interest in the Company (1,000,000 out of the 9,500,000 shares outstanding). - -------------------------------------------------------------------------------- (d) FRACTIONAL INTERESTS. Section 6.3.(A) of the Plan provides that notwithstanding any other provision of the Plan, only whole numbers of shares of New Penn Traffic Common Shares will be issued. When any distribution on account of an Allowed Claim would otherwise result in the issuance of a number of shares of New Penn Traffic Common Shares that are not a whole number, the actual distribution of such Shares will be rounded to the next higher or lower whole number of Shares as follows: (i) fractions equal to or greater than 1/2 will be rounded to the next higher whole number; and (ii) fractions less than 1/2 will be rounded to the next lower number. No consideration will be provided in lieu of fractional shares that are rounded down. (e) DISPUTED CLAIMS AND PAYMENTS. Pursuant to Section 6.3.(D) of the Plan, notwithstanding anything to the contrary in the Plan, if any portion of a Claim is a Disputed Claim, no payment or distribution provided in the Plan 86 will be made on account of the portion of such Claim that is a Disputed Claim unless and until such Disputed Claim becomes an Allowed Claim. However, payment or distribution provided in the Plan will be made on account of the portion of such Claim that is an Allowed Claim. No Claim will be allowed under the Plan or otherwise to the extent that it is for post-petition fees or interest. If any dispute arises as to the identity of the holder of an Allowed Claim entitled to receive any distribution under the Plan, then pursuant to Section 6.3.(E) of the Plan, the Reorganized Debtors may retain such distribution until its disposition is determined by a Final Order or written agreement among the interested parties to such dispute. (f) DELIVERY OF DISTRIBUTIONS. Section 6.3.(F) of the Plan provides that, subject to Bankruptcy Rule 9010 and Sections 6.2.(A) and (B) of the Plan, all distributions to any holder of an Allowed Claim, except the holder of a Senior Note Allowed Claim, will be made at the address of such holder as set forth on the Schedules filed with the Bankruptcy Court or on the books and records of the Debtors or their agents, unless the Debtors have been notified in writing of a change of address, including, without limitation, by the filing of a proof of claim by such holder that contains an address for such holder different from the address reflected on such Schedules for such holder. All distributions to any holder of a Senior Note Allowed Claim will be made to the Senior Note Trustee. Section 6.3.(F) also provides that, in the event that any distribution to any holder is returned as undeliverable, no further distributions will be made in respect of such Claim unless and until the Disbursing Agent or the Senior Note Trustee is notified in writing of such Claim holder's then current address, at which time such distribution will be made to such holder without interest; provided that such distributions will be deemed Unclaimed Property at the expiration of one hundred twenty (120) days after the distribution date applicable to such distribution. (g) UNCLAIMED PROPERTY. Pursuant to Section 6.3.(H) of the Plan, if there is a distribution on account of an Allowed Class 3 Claim or Allowed Class 4 Claim under the Plan and such distribution remains unclaimed by the holder of such Allowed Class 3 Claim or Allowed Class 4 Claim for one hundred twenty (120) days, the holder of such Allowed Claim will cease to be entitled to such distribution and the distribution will revert to Reorganized Penn Traffic. I. PROCEDURE FOR DETERMINATION OF CLAIMS AND INTERESTS 1. BAR DATE FOR CERTAIN ADMINISTRATIVE CLAIMS Pursuant to Section 6.4.(A) of the Plan, all applications for final compensation of Case Professionals and on account of services rendered prior to the Effective Date, and all other requests for payment of Administrative Claims (except for ordinary course trade debt and customer deposits and credits incurred in the ordinary course of business after the Petition Date) will be served on the Reorganized Debtors and Post-Effective Date Committee in accordance with Section 9.10. of the Plan and filed with the Bankruptcy Court, no later than 25 days after the Effective Date. Any such 87 claim that is not served and filed within this time period will be forever barred. Objections to any such application must be filed within 15 days after receipt thereof. 2. OBJECTIONS TO CLAIMS Section 6.4.(B) of the Plan provides that objections to any Claim filed by any party other than the Debtors (other than Administrative Claims governed by Section 6.4.(B) of the Plan) must be filed no later than twenty (20) days before the Effective Date; PROVIDED, HOWEVER, that the Reorganized Debtors, and only the Reorganized Debtors, may file objections to Claims, subsequent to the Effective Date, through and including 60 days after the Effective Date. In accordance with Section 6.5.(D) of the Plan, payment or distribution will be made on account of all or any portion of such Claim that is an Allowed Claim. To the extent any property is distributed to an entity on account of a Claim that is not an Allowed Claim, such property will be held in trust for and will promptly be returned to the Reorganized Debtors. On and after the Effective Date, the Reorganized Debtors will have authority to continue to prosecute, settle or withdraw objections to Claims and will be entitled to compromise or settle any Disputed Claim in accordance with Section 5.2. of the Plan. J. EFFECT OF THE PLAN ON CLAIMS AND INTERESTS 1. REVESTING OF ASSETS Pursuant to Section 8.1. of the Plan and except as otherwise provided in the Plan, on the Effective Date, all property of the Estate, to the full extent of Section 541 of the Code, and any and all other rights and assets of the Debtors of every kind and nature will revest in the Reorganized Debtors free and clear of all Liens, Claims and Interests other than (i) those Liens, Claims and Interests retained or created pursuant to the Plan or any document entered into in connection with the transactions described in the Plan, (ii) Liens that have arisen subsequent to the Petition Date on account of taxes that arose subsequent to the Petition Date, and (iii) Trust Assets, which will be transferred to the Penn Traffic Creditor Trust pursuant to Article VII. of the Plan. 2. DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS Section 8.2. of the Plan provides that as of the Effective Date, except as provided in the Confirmation Order, the rights afforded under the Plan and the treatment of Claims and Interests under the Plan will be in exchange for and in complete satisfaction, discharge and release of all Claims and satisfaction or termination of all Interests, including any interest accrued on Claims from and after the Petition Date. Except as otherwise provided in the Plan or the Confirmation Order, Confirmation will, as of the Effective Date: (i) discharge the Debtors from all Claims or other debts that arose before the Effective Date, and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Code, whether or not (x) a proof of claim based on such debt is filed or deemed filed pursuant to Section 501 of the Code, (y) a Claim based on 88 such debt is Allowed pursuant to Section 502 of the Code, or (z) the holder of a Claim based on such debt has accepted the Plan; and (ii) satisfy, terminate or cancel all Interests and other rights of equity security holders in the Debtors. As of the Effective Date, except as provided in the Plan, including Section 5.14. of the Plan, or the Confirmation Order, all Persons will be precluded from asserting against the Debtors or the Reorganized Debtors, or their respective successors or property, any other or further Claims, demands, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction or other activity of any kind or nature that occurred prior to the Effective Date. In accordance with the foregoing, except as provided in the Plan, including Section 5.14. of the Plan, or the Confirmation Order, the Confirmation Order will be a judicial determination, as of the Effective Date, of discharge of all such Claims and other debts and liabilities against the Debtors and satisfaction, termination or cancellation of all Interests and other rights of equity security holders in the Debtors, pursuant to Sections 524 and 1141 of the Code, and such discharge will void any judgment obtained against the Debtors or the Reorganized Debtors at any time, to the extent that such judgment relates to a discharged Claim. 3. INJUNCTIONS PURSUANT TO SECTION 8.3. OF THE PLAN, EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, INCLUDING SECTION 5.14. OF THE PLAN, OR THE CONFIRMATION ORDER, AS OF THE EFFECTIVE DATE, ALL PERSONS THAT HAVE HELD, CURRENTLY HOLD OR MAY HOLD A CLAIM OR OTHER DEBT OR LIABILITY THAT IS DISCHARGED OR AN INTEREST OR OTHER RIGHT OF AN EQUITY SECURITY HOLDER THAT IS TERMINATED PURSUANT TO THE TERMS OF THE PLAN ARE PERMANENTLY ENJOINED FROM TAKING ANY OF THE FOLLOWING ACTIONS ON ACCOUNT OF ANY SUCH DISCHARGED CLAIMS, DEBTS OR LIABILITIES OR TERMINATED INTERESTS OR RIGHTS: (I) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING AGAINST THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; (II) ENFORCING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; (III) CREATING, PERFECTING OR ENFORCING ANY LIEN OR ENCUMBRANCE AGAINST THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; (IV) ASSERTING A SETOFF, RIGHT OF SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO THE DEBTORS OR THE REORGANIZED DEBTORS OR THEIR RESPECTIVE PROPERTY; AND (V) COMMENCING OR CONTINUING ANY ACTION, IN ANY MANNER, IN ANY PLACE THAT DOES NOT COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THE PLAN. ADDITIONALLY, EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, INCLUDING SECTION 5.14. OF THE PLAN, AS OF THE EFFECTIVE DATE, ALL PERSONS THAT HAVE HELD, CURRENTLY HOLD OR MAY HOLD A CLAIM, DEMAND, DEBT, RIGHT, CAUSE OF ACTION OR LIABILITY THAT IS RELEASED PURSUANT TO THE PLAN ARE PERMANENTLY ENJOINED FROM TAKING ANY OF THE FOLLOWING ACTIONS ON ACCOUNT OF SUCH RELEASED CLAIMS, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION OR LIABILITIES: (I) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING; (II) ENFORCING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER ANY JUDGMENT, AWARD, DECREE OR ORDER; (III) CREATING, PERFECTING OR ENFORCING 89 ANY LIEN OR ENCUMBRANCE; (IV) ASSERTING A SETOFF, RIGHT OF SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO ANY RELEASED ENTITY; AND (V) COMMENCING OR CONTINUING ANY ACTION, IN ANY MANNER, IN ANY PLACE THAT DOES NOT COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THE PLAN. IN EXCHANGE FOR THE DISTRIBUTIONS PURSUANT TO THE PLAN, EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, INCLUDING SECTION 5.14. OF THE PLAN, EACH HOLDER OF AN ALLOWED CLAIM RECEIVING SUCH DISTRIBUTION PURSUANT TO THE PLAN WILL BE DEEMED TO HAVE SPECIFICALLY CONSENTED TO THE INJUNCTIONS SET FORTH IN SECTION 8.3. OF THE PLAN. 4. LIMITATION OF LIABILITY PURSUANT TO SECTION 8.4. OF THE PLAN, SUBJECT IN ALL RESPECTS TO SECTION 8.7. OF THE PLAN, NONE OF THE DEBTORS, THE REORGANIZED DEBTORS, THE CREDITORS' COMMITTEE, THE POST-EFFECTIVE DATE COMMITTEE, THE TRUST ADVISORY BOARD, THE PRE-PETITION SECURED LENDERS, THE DIP LENDERS, THE SENIOR NOTE TRUSTEE, NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, MEMBERS, ATTORNEYS, INVESTMENT BANKERS, RESTRUCTURING CONSULTANTS AND FINANCIAL ADVISORS, NOR ANY OTHER PROFESSIONAL PERSONS EMPLOYED BY ANY OF THEM (COLLECTIVELY, THE "EXCULPATED PERSONS"), WILL HAVE OR INCUR ANY LIABILITY TO ANY PERSON FOR ANY ACT TAKEN OR OMISSION FROM AND AFTER THE PETITION DATE IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS, THE FORMULATION, NEGOTIATION, IMPLEMENTATION, CONFIRMATION OR CONSUMMATION OF THE PLAN, THE FIRST AMENDED DISCLOSURE STATEMENT OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED IN CONNECTION WITH THE PLAN. THE EXCULPATED PERSONS WILL HAVE NO LIABILITY TO ANY DEBTOR, HOLDER OF A CLAIM, HOLDER OF AN INTEREST, OTHER PARTY IN INTEREST IN THE CASES OR ANY OTHER PERSON FOR ACTIONS TAKEN OR NOT TAKEN IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS, THE PLAN OR THE PROPERTY TO BE DISTRIBUTED UNDER THE PLAN, INCLUDING, WITHOUT LIMITATION, FAILURE TO OBTAIN CONFIRMATION OF THE PLAN OR TO SATISFY ANY CONDITION OR CONDITIONS, OR REFUSAL TO WAIVE ANY CONDITION OR CONDITIONS, TO THE OCCURRENCE OF THE EFFECTIVE DATE, AND IN ALL RESPECTS SUCH EXCULPATED PERSONS WILL BE ENTITLED TO RELY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND RESPONSIBILITIES IN THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS AND UNDER THE PLAN. NOTHING IN THIS PARAGRAPH WILL EXCULPATE, DISCHARGE, RELEASE OR RELIEVE ANY PERSON IN A MANNER CONTRARY TO THE LANGUAGE OF SECTION 5.14. OF THE PLAN. 5. RELEASES PURSUANT TO SECTION 8.5.(A) OF THE PLAN, SUBJECT IN ALL RESPECTS TO SECTION 8.7. OF THE PLAN, ON THE EFFECTIVE DATE, THE DEBTORS AND THE REORGANIZED DEBTORS ON THEIR OWN BEHALF AND AS REPRESENTATIVES OF THE ESTATES, RELEASE UNCONDITIONALLY, AND ARE DEEMED TO RELEASE UNCONDITIONALLY, (I) EACH OF THE DEBTORS' OFFICERS AND DIRECTORS WHO SERVED AT ANY TIME DURING THE CASES, (II) ANY PERSON THAT ELECTED SUCH DIRECTORS TO THE EXTENT OF ALLEGED LIABILITY FOR ACTIONS OR INACTIONS OF SUCH DIRECTORS, (III) THE MEMBERS OF THE CREDITORS' COMMITTEE, (IV) THE DIP LENDERS, (V) THE PRE-PETITION SECURED LENDERS, (VI) THE SENIOR NOTE TRUSTEE, AND (VII) THE 90 ATTORNEYS, INVESTMENT BANKERS, RESTRUCTURING CONSULTANTS AND FINANCIAL ADVISORS OF THE FOREGOING, INCLUDING THE DEBTORS AND THE REORGANIZED DEBTORS, FROM ANY AND ALL CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, RIGHTS, CAUSES OF ACTION AND LIABILITIES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THOSE ARISING UNDER THE CODE), WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, BASED IN WHOLE OR IN PART ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE ON OR AFTER THE PETITION DATE THROUGH AND INCLUDING THE EFFECTIVE DATE IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE CASES, THE MANAGEMENT AND OPERATION OF THE DEBTORS, THE FORMULATION, NEGOTIATION, IMPLEMENTATION, CONFIRMATION OR CONSUMMATION OF THE PLAN, THE FIRST AMENDED DISCLOSURE STATEMENT OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED IN CONNECTION WITH THE PLAN; PROVIDED, HOWEVER, THAT NOTHING IN SECTION 8.5.(A) OF THE PLAN WILL (I) BE CONSTRUED TO RELEASE OR EXCULPATE ANY PERSON OR ENTITY FROM FRAUD, WILLFUL MISCONDUCT OR CRIMINAL CONDUCT OR (II) LIMIT THE LIABILITY OF THE PROFESSIONALS OF THE DEBTORS, THE REORGANIZED DEBTORS OR THE CREDITORS' COMMITTEE TO THEIR RESPECTIVE CLIENTS PURSUANT TO DR6-102 OF THE CODE OF PROFESSIONAL RESPONSIBILITY; AND, PROVIDED, FURTHER, THAT NOTHING IN SECTION 8.5.(A) OF THE PLAN WILL RELEASE THE OBLIGATION OF ANY DIRECTORS AND OFFICERS OF THE DEBTORS UNDER ANY LOANS DUE AND OWING BY SUCH PARTY TO THE DEBTORS. PURSUANT TO SECTION 8.5.(B) OF THE PLAN, SUBJECT IN ALL RESPECTS TO SECTION 8.7. OF THE PLAN, ON THE EFFECTIVE DATE, THE REORGANIZED DEBTORS ON THEIR OWN BEHALF AND AS REPRESENTATIVES OF THE ESTATES, RELEASE UNCONDITIONALLY, AND ARE DEEMED TO RELEASE UNCONDITIONALLY, (I) EACH OF THE DEBTORS' FORMER AND PRESENT OFFICERS AND DIRECTORS, (II) ANY PERSONS THAT ELECTED SUCH DIRECTORS TO THE EXTENT OF ALLEGED LIABILITY FOR ACTIONS OR INACTIONS OF SUCH DIRECTORS, (II) THE PRE-PETITION SECURED LENDERS, (III) THE SENIOR NOTE TRUSTEE, AND (IV) THE ATTORNEYS, INVESTMENT BANKERS, RESTRUCTURING CONSULTANTS AND FINANCIAL ADVISORS OF THE FOREGOING, INCLUDING THE DEBTORS AND REORGANIZED DEBTORS (COLLECTIVELY, THE "PRE-PETITION RELEASEES") FROM ANY AND ALL CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, RIGHTS, CAUSES OF ACTION AND LIABILITIES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THOSE ARISING UNDER THE CODE), WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, BASED IN WHOLE OR IN PART ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE BEFORE THE PETITION DATE IN CONNECTION WITH OR RELATING TO PENN TRAFFIC OR ANY OF ITS DIRECT OR INDIRECT SUBSIDIARIES ("PRE-PETITION RELEASED MATTERS"); PROVIDED, HOWEVER, THAT NOTHING IN SECTION 8.5.(B) OF THE PLAN WILL (I) BE CONSTRUED TO RELEASE OR EXCULPATE ANY PERSON OR ENTITY FROM FRAUD, WILLFUL MISCONDUCT OR CRIMINAL CONDUCT OR (II) LIMIT THE LIABILITY OF THE PROFESSIONALS OF THE DEBTORS AND THE REORGANIZED DEBTORS TO THEIR RESPECTIVE CLIENTS PURSUANT TO DR6-102 OF THE CODE OF PROFESSIONAL RESPONSIBILITY; AND, PROVIDED, FURTHER, THAT NOTHING IN SECTION 8.5.(B) OF THE PLAN WILL RELEASE THE OBLIGATION OF ANY DIRECTORS AND OFFICERS OF THE DEBTORS UNDER ANY LOANS DUE AND OWING BY SUCH PARTY TO THE DEBTORS. ON THE EFFECTIVE DATE, EACH HOLDER OF A CLAIM THAT IS ENTITLED TO VOTE ON THE PLAN WILL BE DEEMED TO HAVE UNCONDITIONALLY RELEASED THE PRE-PETITION 91 RELEASEES FROM THE PRE-PETITION RELEASED MATTERS; PROVIDED, HOWEVER, THAT EACH HOLDER OF A CLAIM ENTITLED TO VOTE ON THE PLAN MAY ELECT, BY CHECKING THE BOX PROVIDED ON THE BALLOT, NOT TO GRANT THE RELEASES SET FORTH IN SECTION 8.5.(C) OF THE PLAN. THE CONFIRMATION ORDER WILL CONTAIN A PERMANENT INJUNCTION TO EFFECTUATE THE RELEASES GRANTED IN SECTION 8.5. OF THE PLAN. PURSUANT TO SECTION 8.7. OF THE PLAN, NOTWITHSTANDING ANYTHING IN THE PLAN TO THE CONTRARY, INCLUDING WITHOUT LIMITATION SECTION 8.5. OF THE PLAN, NO PROVISION OF THE PLAN OR THE CONFIRMATION ORDER, INCLUDING, WITHOUT LIMITATION, ANY EXCULPATION, INDEMNIFICATION OR RELEASE PROVISION, WILL MODIFY, RELEASE, OR OTHERWISE LIMIT THE LIABILITY OF (I) ANY PERSON WITH RESPECT TO ANY TRUST CLAIM, OR (II) ANY PERSON NOT SPECIFICALLY RELEASED HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY PERSON THAT IS A CO-OBLIGOR OR JOINT TORTFEASOR OF A RELEASED PARTY OR THAT IS OTHERWISE LIABLE UNDER THEORIES OF VICARIOUS OR OTHER DERIVATIVE LIABILITY. THE REORGANIZED DEBTORS WILL NOT PROVIDE INDEMNIFICATION ON ACCOUNT OF (I) AND (II) ABOVE. UNDER THE PLAN, A "TRUST CLAIM" MEANS ANY AND ALL CAUSES OF ACTION AGAINST (A) ANY PERSON (EXCLUDING KROLL ZOLFO COOPER LLC, KZCS, LLC AND PAUL, WEISS, RIFKIND, WHARTON & GARRISON, LLP, AND EACH OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES AND MEMBERS), WHICH ALLEGE BREACHES OF DUTY OWED TO PENN TRAFFIC BY SUCH PERSON AND WHICH ARE THE SUBJECT MATTER OF ANY ACTION OR PROCEEDING INSTITUTED BY THE SECURITIES AND EXCHANGE COMMISSION AGAINST SUCH PERSON, WHETHER SUCH ACTION OR PROCEEDING IS ADJUDICATED OR SETTLED, AND (B) ANY ACCOUNTING OR AUDITING FIRM (INCLUDING BUT NOT LIMITED TO PRICEWATERHOUSECOOPERS LLP) WITH RESPECT TO THE DEBTORS' ACCOUNTING PRACTICES OR AUDIT OR REVIEW OF THE DEBTORS' FINANCIAL STATEMENTS. K. MISCELLANEOUS PROVISIONS 1. RETENTION OF JURISDICTION Pursuant to Section 9.1. of the Plan, following the Effective Date, the Bankruptcy Court will retain jurisdiction over matters to the fullest extent available under applicable law, including, without limitation: (a) To determine the allowability, classification and priority of Claims and Interests upon objection, or to estimate, pursuant to Section 502(c) of the Code, the amount of any Claim that is or is anticipated to be contingent or unliquidated as of the Effective Date; (b) To construe and to take any action authorized by the Code and requested by the Reorganized Debtors or any other party in interest to enforce the Plan and the documents and agreements filed in connection with the Plan, issue such orders as may be necessary for the implementation, execution and consummation of the Plan, including, without limiting the generality of the foregoing, orders to expedite regulatory 92 decisions for the implementation of the Plan and to ensure conformity with the terms and conditions of the Plan, such documents and agreements and other orders of the Bankruptcy Court, notwithstanding any otherwise applicable non-bankruptcy law; (c) To determine any and all applications for allowance of compensation and expense reimbursement of professionals retained by the Debtors, the Reorganized Debtors or the Creditors' Committee, and for members of the Creditors' Committee, for periods on or before the Effective Date, and to determine any other request for payment of administrative expenses; (d) To determine all matters that may be pending before the Bankruptcy Court on or before the Effective Date; (e) To resolve any dispute regarding the implementation or interpretation of the Plan, or any related agreement or document that arises at any time before the Cases are closed, including determination, to the extent a dispute arises, of the entities entitled to a distribution within any particular Class of Claims and of the scope and nature of the Reorganized Debtors' obligations to cure defaults under assumed contracts, leases, franchises and permits; (f) To determine any and all matters relating to the rejection, assumption or assignment of executory contracts or unexpired leases entered into prior to the Petition Date, the nature and amount of any Cure required for the assumption of any executory contract or unexpired lease, and the allowance of any Claim resulting therefrom; (g) To determine all applications, adversary proceedings, contested matters and other litigated matters that were brought or that could have been brought in the Bankruptcy Court on or before the Effective Date; (h) To determine matters concerning local, state and federal taxes in accordance with Sections 346, 505 and 1146 of the Code, and to determine any tax claims that may arise against the Debtors or the Reorganized Debtors as a result of the transactions contemplated by the Plan; (i) To modify the Plan pursuant to Section 1127 of the Code or to remedy any apparent nonmaterial defect or omission in the Plan, or to reconcile any nonmaterial inconsistency in the Plan so as to carry out its intent and purposes; and (j) To hear and determine disputes arising in connection with the interpretation, implementation or enforcement of the Penn Traffic Creditor Trust and the Post-Effective Date Trade Lien Program, including any requests by the Trustee pursuant to Section 7.3.(D) of the Plan for additional Funding Contributions, and to issue, at the request of the Trustee, orders pursuant to Bankruptcy Rule 2004 relating to Trust Claims to use in the administration of the Creditor Trust. 93 Notwithstanding anything contained herein to the contrary, the Bankruptcy Court retains exclusive jurisdiction to adjudicate Trust Claims and to hear and determine any disputes related to Trust Claims and any motions to compromise or settle such Trust Claims; provided, however, that the Trustee, on behalf of the Penn Traffic Creditor Trust, will have authority to bring Trust Claims in any court of competent jurisdiction. From the Confirmation Date through the Effective Date, the Bankruptcy Court will retain jurisdiction with respect to each of the foregoing items and all other matters that were subject to its jurisdiction prior to the Confirmation Date. 2. RETENTION AND ENFORCEMENT OF CAUSES OF ACTION Pursuant to Section 8.6. of the Plan, except as otherwise set forth in the Plan, pursuant to Section 1123(b)(3)(B) of the Code, on the Effective Date, all Causes of Action, including, without limitation, the Causes of Action identified on Plan Schedule 8.6, to be filed on or before the Exhibit Filing Date, but excluding Trust Claims, will become the property of the Reorganized Debtors and the Reorganized Debtors will retain all Causes of Action that the Debtors had or had power to assert on behalf of their Estates immediately prior to the Effective Date, whether or not such Causes of Action are listed on Plan Schedule 8.6, and may commence or continue in any appropriate court or tribunal any suit or other proceeding for the enforcement of such Causes of Action; PROVIDED, HOWEVER, that any and all of the Debtors' claims and causes of action arising under Section 547 of the Code that are not the subject of pending litigation as of the Effective Date (collectively, the "PREFERENCE ACTIONS") will be waived, abandoned, discharged and released pursuant to the Plan. Except with respect to Preference Actions and except as otherwise set forth in the Plan, nothing contained in the Plan will constitute a release, satisfaction or settlement of the Causes of Action or any Trust Claim will constitute a waiver of the rights, if any, of the Debtors, the Reorganized Debtors or the Penn Traffic Creditor Trust to a jury trial with respect to any Cause of Action or any Trust Claim, or objection to any Claim or Interest, and nothing in the Plan or the Confirmation Order, including the allowance of any Claim of a defendant in any Cause of Action or any Trust Claim, will constitute a waiver or release of any Cause of Action under the doctrine of RES JUDICATA nor will any Cause of Action or Trust Claim be barred or limited by any estoppel, whether judicial, equitable or otherwise. 94 The Debtors, in consultation with the Creditors' Committee, continue to investigate whether there are Preference Actions which they intend to commence prior to the Effective Date. As an inducement to trade vendors to participate in the Trade Lien Program, the Debtors already have waived certain Preference Actions they may have had against such participating trade vendors. Among other factors, the Debtors are considering the cost, resources and time required to pursue such actions, as well as the likelihood of success and the risk to the Reorganized Debtors' ongoing business relationships of instituting any such actions against third parties that are expected to continue to do business with the Reorganized Debtors. Based on this analysis to date, the Debtors and the Committee anticipate that few, if any, Preference Actions will be instituted prior to the Effective Date and do not believe that the waiver of Preference Actions after the Effective Date, as contemplated in Section 8.6. of the Plan, will significantly impact the proposed distributions to creditors in these Cases. Furthermore, despite the waiver of Preference Actions after the Effective Date, the Debtors and the Creditors' Committee believe that confirmation of the Plan is in the best interests of their creditors and equity security holders, satisfying the requirements of Section 1129(a)(7) of the Code. 3. CONFIRMATION ORDER AND PLAN CONTROL Section 9.4. of the Plan provides that, except as otherwise provided in the Plan, in the event that there is any inconsistency between the Plan and this First Amended Disclosure Statement, any exhibit to the Plan or any other instrument or document created or executed pursuant to the Plan, the Plan will control. In the event there is any inconsistency between the Plan and the Confirmation Order, the Confirmation Order will control. 4. SEVERABILITY Section 9.6. of the Plan provides that if the Bankruptcy Court determines at the Confirmation Hearing that any material provision of the Plan is invalid or unenforceable, such provision, subject to Section 1127 of the Code, will be severable from the Plan and will be null and void, and, in such event, such determination will in no way limit or affect the enforceability or operative effect of any or all other portions of the Plan. 5. MODIFICATIONS TO THE PLAN Pursuant to Section 9.8. of the Plan, upon the mutual consent of the Debtors and the Creditors' Committee, the Plan, and any Exhibit or Schedule to the Plan, may be amended or modified at any time prior to the Confirmation Date in accordance with the Code and Bankruptcy Rules. 6. REVOCATION, WITHDRAWAL OR NON-CONSUMMATION Section 9.9. of the Plan provides that the Debtors have the right to revoke or withdraw the Plan at any time prior to the Effective Date. If the Debtors revoke or 95 withdraw the Plan prior to the Effective Date, or if the Confirmation Date or the Effective Date does not occur, then the Plan, any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain any Claim or Class of Claims), the assumption or rejection of executory contracts or leases effected by the Plan, and any document or agreement executed pursuant to the Plan will be null and void; PROVIDED, HOWEVER, that all orders of the Bankruptcy Court and all documents executed pursuant thereto will remain in full force and effect. In such event, nothing contained herein, and no acts taken in preparation for consummation of the Plan, will be deemed to constitute a waiver or release of any Claims by or against any of the Debtors or any other Person, to prejudice in any manner the rights of any of the Debtors or any Person in any further proceedings or to constitute an admission of any sort by any of the Debtors or any other Person. L. EXEMPTION FROM SECURITIES LAWS Holders of Allowed Claims in Class 3 will receive their PRO RATA share of New Penn Traffic Common Shares under the Plan. The Debtors believe that the provisions of Section 1145(a)(1) of the Code exempt the offer and distribution of the New Penn Traffic Common Shares from federal, state and local securities registration requirements (including, without limitation, Section 5 of the Securities Act or any similar state or local law requiring the registration for offer or sale of a security of registration of licensing of an issuer or a security). 1. CODE EXEMPTION FROM REGISTRATION REQUIREMENTS (a) INITIAL OFFER AND SALE OF SECURITIES. Section 1145(a)(1) of the Code exempts the offer and sale of securities under a plan of reorganization from registration under the Securities Act and state laws if three principal requirements are satisfied: (i) the securities must be offered and sold under a plan of reorganization and must be securities of the debtor, of an affiliate participating in a joint plan with the debtor or of a successor to the debtor under the plan; (ii) the recipient of the securities must hold a pre-petition or administrative claim against, or an interest in, the debtor; and (iii) the securities must be issued entirely in exchange for the recipient's claim against or interest in the debtor, or principally in such exchange and partly for cash or property. (b) SUBSEQUENT TRANSFERS OF SECURITIES. In general, all resales and subsequent transactions in such common shares will be exempt from registration under the Securities Act pursuant to Section 4(1) of the Securities Act, unless the holder thereof is deemed to be an "underwriter" with respect to such securities or a "dealer." Section 1145(b)(1) of the Code defines four types of "underwriters:" (i) persons who purchase a claim against, an interest in or a claim for administrative expense against the debtor with a view to distributing any security received in exchange for such a claim or interest ("accumulators"); 96 (ii) persons who offer to sell securities offered under a plan for the holders of such securities; (iii) persons who offer to buy securities offered under a plan from the holders of such securities, if the offer to buy is (x) with a view to distributing such securities and (y) made under a distribution agreement (together with the persons described in clause (ii) above, "distributors"); or (iv) a person who is an "issuer" with respect to the securities, as the term "issuer" is defined in Section 2(11) of the Securities Act. Under Section 2(11) of the Securities Act, an "issuer" includes any "affiliate" of the issuer, which means any person directly or indirectly through one or more intermediaries controlling, controlled by or under common control with the issuer. Under Section 2(12) of the Securities Act, a "dealer" is any person who engages either for all or part of his or her time, directly or indirectly, as agent, broker or principal, in the business of offering, buying, selling or otherwise dealing or trading in securities issued by another person. Whether any particular person would be deemed to be an "underwriter" with respect to the common shares or a "dealer" would depend upon various facts and circumstances applicable to that person. Accordingly, the Debtors express no view as to whether any person would be an "underwriter" or a "dealer." Resales by accumulators and distributors of securities distributed under a plan of reorganization who are not affiliates of the issuer of such securities are exempt from registration under the Securities Act if effected in "ordinary trading transactions." The staff of the SEC has indicated in this context that a transaction by such non-affiliates may be considered an "ordinary trading transaction" if it is made on an exchange or in the over-the-counter market and does not involve any of the following factors: (i) (x) concerted action by the recipients of securities issued under a plan in connection with the sale of such securities or (y) concerted action by distributors on behalf of one or more such recipients in connection with such sales; (ii) the use of informational documents concerning the offering of the securities prepared or used to assist in the resale of such securities, other than a bankruptcy court-approved disclosure statement and supplements thereto, and documents filed with the SEC pursuant to the Securities Act; or (iii) the payment of special compensation to brokers and dealers in connection with the sale of such securities designed as a special incentive to the resale of such securities (other than the compensation that would be paid pursuant to arm's-length negotiations between a seller and a broker or dealer, each acting unilaterally, not greater than the 97 compensation that would be paid for a routine similar-sized sale of similar securities of a similar issuer). The views of the SEC on the matter have not, however, been sought by the Debtors and, therefore, no assurance can be given regarding the proper application of the "ordinary trading transaction" exemption described above. Any person intending to rely on such exemption is urged to consult his or her own counsel as to the applicability thereof to his or her circumstances. Securities Act Rule 144 provides an exemption from registration under the Securities Act for certain limited public resales of unrestricted securities by "affiliates" of the issuer of such securities. Rule 144 allows a holder of unrestricted securities that is an affiliate of the issuer of such securities to sell, without registration, within any three-month period a number of shares of such unrestricted securities that does not exceed the greater of one percent (1%) of the number of outstanding securities in question or the average weekly trading volume in the securities in question during the four calendar weeks preceding the date on which notice of such sale was filed pursuant to Rule 144, subject to the satisfaction of certain other requirements of Rule 144 regarding the manner of sale, notice requirements and the availability of current public information regarding the issuer. The Debtors believe that, pursuant to Section 1145(c) of the Code, the unregistered securities being distributed under and in connection with the Plan will be unrestricted securities for purposes of Rule 144. GIVEN THE COMPLEX NATURE OF THE QUESTION OF WHETHER A PARTICULAR PERSON MAY BE AN UNDERWRITER, THE DEBTORS MAKE NO REPRESENTATIONS CONCERNING THE RIGHT OF ANY PERSON TO TRADE IN THE SHARES ISSUED UNDER THE PLAN. THE DEBTORS RECOMMEND THAT HOLDERS OF CLAIMS CONSULT THEIR OWN COUNSEL CONCERNING WHETHER THEY MAY FREELY TRADE SUCH SECURITIES. (c) CERTAIN TRANSACTIONS BY STOCKBROKERS. Under Section 1145(a)(4) of the Code, stockbrokers effecting transactions in the New Penn Traffic Common Shares issued under the Plan prior to the expiration of 40 days after the Effective Date are required to deliver to the purchaser of such securities a copy of this First Amended Disclosure Statement (and supplements hereto, if any, if ordered by the Bankruptcy Court) at or before the time of delivery of such securities to such purchaser. THE DEBTORS DO NOT PRESENTLY INTEND TO SUBMIT ANY NO-ACTION OR INTERPRETATIVE REQUESTS TO THE SEC WITH RESPECT TO ANY SECURITIES LAWS MATTERS. V. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following discussion summarizes certain federal income tax consequences of the implementation of the Plan to holders of Unsecured Claims and to the Debtors. It does not address the federal income tax consequences to holders whose 98 secured or priority Claims are entitled to reinstatement or payment in full in cash under the Plan. The following summary is based on the Internal Revenue Code of 1986, as amended (the "TAX Code"), Treasury regulations promulgated and proposed thereunder, judicial decisions, and published administrative rules and pronouncements of the IRS in effect on the date hereof. Changes in, or new interpretations of, such rules may have retroactive effect and could significantly affect the federal income tax consequences described below. The federal income tax consequences of the Plan are complex and are subject to uncertainties. The Debtors have not requested a ruling from the IRS or an opinion of counsel with respect to any of the tax aspects of the Plan. Thus, no assurance can be given as to the interpretation that the IRS will adopt. In addition, this summary does not address foreign, state, or local tax consequences of the Plan, and it does not purport to address the federal income tax consequences of the Plan to special classes of taxpayer (such as foreign taxpayers, broker-dealers, banks, mutual funds, insurance companies, financial institutions, small business investment companies, regulated investment companies, tax-exempt organizations, and investors in pass-through entities). ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE INDIVIDUAL CIRCUMSTANCES OF A HOLDER OF A CLAIM OR EQUITY INTEREST. EACH HOLDER OF A CLAIM OR EQUITY INTEREST IS URGED TO CONSULT ITS OWN TAX ADVISOR FOR THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES APPLICABLE UNDER THE PLAN. A. CONSEQUENCES TO CREDITORS 1. TAX SECURITIES The federal income tax consequences of the Plan may vary depending upon, among other things, whether a holder's Claim being exchanged constitutes a "security" of the Debtors for federal income tax purposes (a "TAX SECURITY"). The term "security" is not defined in the Tax Code but is generally understood to include stock, rights to purchase stock, and debt instruments with a maturity more than 10 years from the date of issuance, although the determination whether a particular claim or debt constitutes a Tax Security depends upon an overall evaluation of the nature of the claim or debt. An instrument with an original term of as little as 5 years may qualify. Under these principles, the New Penn Traffic Common Shares will be characterized as a Tax Security, and it is likely that the Senior Notes will be characterized as Tax Securities. It is unclear whether other Class 3 Claims or Class 4 Claims will be classified as Tax Securities. Each holder should consult its tax advisor regarding the tax status of its Claim or Claims. 99 The Tax Security issue arises because the Tax Code's corporate reorganization provisions generally provide that a holder recognizes no gain or loss upon exchanging an issuer's Tax Securities for other Tax Securities of such issuer (except that consideration received for a claim for accrued but unpaid interest must be included as current income). By contrast, a holder will recognize gain upon exchanging (i) an issuer's obligations that are not Tax Securities for Tax Securities of such issuer, or (ii) an issuer's Tax Securities for obligations of such issuer that are not Tax Securities. See also Subsection A.3. below ("Consequences to Creditors--Claims or Consideration Not Constituting Tax Securities"). To the extent a Claim holder's receipt of the New Penn Traffic Common Shares is attributable to accrued interest, the exchanging holder will recognize current income. 2. CLAIMS AND CONSIDERATION CONSTITUTING TAX SECURITIES In general, each holder of a Claim that constitutes a Tax Security will not recognize any gain or loss upon implementation of the Plan, but may recognize gain computed as described below in Section A.3. A holder's tax basis in New Penn Traffic Common Shares received in satisfaction of a Claim represented by a Tax Security of the Debtors will be such holder's adjusted tax basis in such Claim. A holder's holding period for New Penn Traffic Common Shares received in exchange for the Debtors' Tax Securities will include such holder's holding period for the obligations so exchanged, except to the extent the New Penn Traffic Common Shares was issued in respect of such holder's Claim for accrued interest. A holder's holding period for New Penn Traffic Common Shares issued in respect of its Claim for accrued interest (or in respect of which the holder is otherwise required to recognize gain) will begin on the day after its issuance. 3. CLAIMS NOT CONSTITUTING TAX SECURITIES The exchange of any Class 3 Claims that are not treated as Tax Securities for New Penn Traffic Common Shares or the exchange of any Class 4 Claims that are not treated as Tax Securities for cash would constitute a taxable transaction. See also Subsection C.I. below ("Additional Tax Considerations for All Holders of Claims--Distributions in Discharge of Accrued Interest"). In such case, a holder of such Class 3 or Class 4 Claims would generally recognize gain or loss in an amount equal to the difference between (a) the "amount realized," I.E., the cash and/or aggregate fair market value of all property received by the Claim holder in exchange for its Claim (other than a Claim for interest), and (b) its adjusted basis in the exchanged debt instruments (exclusive of any basis attributable to accrued interest). 100 The character of any gain or loss recognized as long-term or short-term capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the tax status of the holder, whether the Claim constitutes a capital asset in the hand of the holder, whether the Claim has been held for more than twelve months, whether the Claim was purchased at a discount (in which case the market discount rules of the Tax Code may apply to recharacterize a portion of any gain as ordinary income), and whether and to what extent the holder has previously claimed a bad debt deduction in respect of such Claim. Also in this regard, Tax Code Section 582(c) provides that the sale or exchange of a bond, debenture, note, certificate, or other evidence of indebtedness by certain financial institutions will be considered the sale or exchange of a non-capital asset. Accordingly, any gain or loss recognized by such financial institutions as a result of the implementation of the Plan will be ordinary gain or loss, regardless of the nature of their Claims. See also Section C. below ("Additional Tax Considerations for All Holders of Claims"). A holder's tax basis in any New Penn Traffic Common Shares will be the fair market value thereof included in the holder's amount realized on the exchange. The holding period for the New Penn Traffic Common Shares so received will begin on the day following the exchange. B. CONSEQUENCES TO THE DEBTORS The Debtors have reported for federal income tax purposes substantial consolidated net operating loss ("NOL") carryforwards. In addition, the Debtors have substantial tax basis in their assets. As discussed below, certain tax attributes of the Debtors, such as NOLs and tax basis, will be subject to reduction and limitation as a result of implementing the Plan. 1. CANCELLATION OF DEBT In general, the Tax Code provides that a debtor in a bankruptcy case does not include cancellation of debt ("COD") income in its gross income, but rather must reduce its tax attributes, to the extent it has such attributes to reduce, by the amount of COD that otherwise would have been recognized. The amount of COD is the amount by which the indebtedness discharged exceeds the consideration for which it is exchanged. A debtor's tax attributes are generally reduced in the following order until COD is exhausted: NOLs, general business credits, alternative minimum tax credits, capital losses, the tax basis of its assets, passive activity losses, and credits and foreign tax credits. Losses (and tax credits) are reduced only after the debtor's tax liability for the current year is determined (with, in each case, current-year losses being reduced before any carryforwards from prior years), and tax basis is reduced as of the first day of the succeeding year. A debtor's tax basis in its assets will not be reduced below the amount of its liabilities (as defined) outstanding immediately after the COD is recognized. Any COD remaining after exhausting available tax attributes is simply forgiven. The Debtors believe they may have significant COD, which could result in a meaningful reduction in their NOL carryforwards. The Company expects to realize 101 gain on the sale-leaseback transactions described in Section IV.G.6(b) hereof entitled "Sale-Leaseback Transactions" during its fiscal year ending January 28, 2006. Because, assuming the Company emerges from bankruptcy during such fiscal year, its NOL carryforwards will not be reduced by COD income until the first day of the succeeding fiscal year, the full amount of the Company's NOL carryforwards will be available to offset such gain. The sale-leaseback transactions will reduce the amount of tax depreciation and amortization that the Company will be able to utilize on its tax returns starting in the fiscal year ending January 29, 2005, and therefore potentially may increase taxes due in future periods. However, it is not presently expected that the Debtors' NOL carryforwards will be eliminated, nor that the basis of their assets will be reduced. The amount of attribute reduction will depend principally upon the value assigned to the New Penn Traffic Common Shares, and it is not possible to determine in advance with any certainty the value that will be ascribed to such interests. 2. ALTERNATIVE MINIMUM TAX In general, an alternative minimum tax ("AMT") is imposed on a corporation's alternative minimum taxable income ("AMTI") at a 20-percent rate to the extent such tax exceeds the corporation's regular federal income tax. For purposes of computing AMTI, certain tax deductions and other beneficial allowances are modified or eliminated. In particular, even though a corporation otherwise might be able to offset all its taxable income for regular tax purposes by available NOL carryforwards, only 90 percent of AMTI may be offset by available NOL carryforwards (as computed for AMT purposes). Any AMT a corporation pays will generally be allowed as a nonrefundable credit against its regular federal income tax liability in future taxable years when the corporation is no longer subject to AMT. C. ADDITIONAL TAX CONSIDERATIONS FOR ALL CLAIM HOLDERS 1. DISTRIBUTIONS IN DISCHARGE OF ACCRUED INTEREST A Claim holder that receives stock or other property in discharge of a Claim for interest accrued during the period the holder owned such Claim and not previously included in such holder's income will be required to recognize ordinary income equal to the fair market value of the New Penn Traffic Common Shares or other consideration received in respect of such Claim. A holder generally will recognize a deductible loss (or, possibly, a write-off against a reserve for bad debts) to the extent any accrued interest claimed was previously included in its gross income and is not paid in full by the Debtors. The tax basis of any New Penn Traffic Common Shares received in exchange for Claims for accrued interest will be the fair market value of the New Penn Traffic Common Shares. The holding period for such New Penn Traffic Common Shares will begin the day after the exchange. Under the Plan, distributions in respect of Allowed Claims will be allocated first to the stated principal amount of such Claims, with any excess allocated to interest. However, there can be no assurance that the IRS or the courts will respect the Plan allocation for federal income tax purposes. 102 2. SUBSEQUENT SALE OF NEW PENN TRAFFIC COMMON SHARES Any gain recognized by a holder upon a subsequent taxable disposition of New Penn Traffic Common Shares received pursuant to the Plan in satisfaction of a Claim (or any stock or other property received for them in a later tax-free exchange) may be treated as ordinary income to the extent of (i) any bad debt deductions (or additions to a bad debt reserve) previously claimed with respect to its Claim and any ordinary loss deduction incurred upon satisfaction of its Claim, less any income (other than interest income) recognized by the holder upon satisfaction of its Claim, (ii) with respect to a cash-basis holder, any amounts that would have been included in its gross income if the holder's Claim had been satisfied in full but were not included by reason of the cash method of accounting, and (iii) any accrued market discount that is assigned to the New Penn Traffic Common Shares, as discussed in Subsection C.3. below ("Additional Tax Considerations for All Claim Holders--Market Discount"). 3. MARKET DISCOUNT Under the "market discount" provisions of Sections 1276 through 1278, some or all of any gain recognized by a holder exchanging Class 3 Claims for New Penn Traffic Common Shares or Class 4 Claims for cash may be treated as ordinary income (instead of capital gain), to the extent of the amount of "market discount" on the Class 3 or Class 4 Claims. In general, a debt instrument is considered to have been acquired with "market discount" if its holder's adjusted tax basis in the debt instrument is less than (i) the sum of all remaining payments to be made on the debt instrument, excluding "qualified stated interest" or, (ii) in the case of a debt instrument issued with original issue discount, its adjusted issue price, by at least a de minimis amount (equal to 0.25 percent of the sum of all remaining payments to be made on the debt instrument, excluding qualified stated interest, multiplied by the number of remaining whole years to maturity), and the obligation does not have a fixed maturity date within one year from the date of issue. Any gain recognized by a holder on a taxable disposition of Class 3 or Class 4 Claims (determined as described above) that were acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while such Class 3 or Class 4 Claims were considered to be held by the holder (unless the holder elected to include market discount in income as it accrued). To the extent that Class 3 Claims that were acquired with market discount are exchanged in a tax-free or other reorganization transaction for New Penn Traffic Common Shares (as may occur here), any gain recognized on the subsequent sale, exchange, redemption or other disposition of such New Penn Traffic Common Shares may thereby be treated as ordinary income to the extent of the accrued but unrecognized market discount with respect to the exchanged Class 3 Claims. 4. WITHHOLDING All distributions to holders of Allowed Claims under the Plan are subject to applicable withholding (including employment tax withholding). Under federal 103 income tax law, interest, dividends, and other reportable payments may, under certain circumstances, be subject to "backup withholding" at a 31% rate. Backup withholding generally applies if the holder (a) fails to furnish its social security number or other taxpayer identification number ("TIN"), (b) furnishes an incorrect TIN, (c) fails to report properly interest or dividends, or (d) under certain circumstances, fails to provide a certified statement, signed under penalty of perjury, that the TIN provided is its correct number and that it is not subject to backup withholding. Backup withholding is not an additional tax, but merely an advance payment that may be refunded to the extent it results in an overpayment of tax. Certain persons are exempt from backup withholding. THE FOREGOING FEDERAL INCOME TAX SUMMARY HAS BEEN PROVIDED FOR INFORMATIONAL PURPOSES ONLY. ALL CREDITORS AND EQUITY HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES OF THE PLAN. VI. CONFIRMATION OF THE PLAN UNDER THE CODE A. THE CONFIRMATION HEARING AND OBJECTIONS In order for the Plan to be consummated, the Bankruptcy Court must confirm the Plan in accordance with Section 1129 of the Code. The Bankruptcy Court has scheduled a hearing on confirmation of the Plan (the "CONFIRMATION HEARING") at 11:00 A.M., Prevailing Eastern Time, on MARCH 17, 2005, before the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge, Courtroom 520, United States Bankruptcy Court for the Southern District of New York, 300 Quarropas Street, White Plains, New York 10601. The Confirmation Hearing may be adjourned from time to time without further notice except for the announcement of such adjournment by the Bankruptcy Court at such hearing. Section 1128(b) of the Code provides that any party in interest may object to confirmation of a plan. Pursuant to the First Amended Disclosure Statement Approval Order attached hereto as EXHIBIT B, any objections to confirmation of the Plan, including, without limitation, any objections to the assumption or rejection of executory contracts or unexpired leases under the Plan, must be in writing, must set forth the objecting party's standing to assert such objection and the basis of such objection and must be filed with the Bankruptcy Court and served upon the United States Trustee for the Southern District of New York, counsel for the Debtors, counsel for the Post-Petition Lenders, and counsel for the Creditors' Committee, together with proof of such service, so as to be ACTUALLY RECEIVED on or before 4:00 P.M., Prevailing Eastern Time, on MARCH 14, 2005. Objections to confirmation are governed by Bankruptcy Rule 9014 and the First Amended Disclosure Statement Approval Order. PURSUANT TO ORDER OF THE BANKRUPTCY COURT, UNLESS A WRITTEN OBJECTION TO CONFIRMATION IS DULY AND TIMELY FILED AND SERVED, THE BANKRUPTCY COURT IS NOT REQUIRED TO CONSIDER SUCH OBJECTION. 104 B. CONFIRMATION REQUIREMENTS UNDER THE CODE In order for a plan of reorganization to be confirmed, the Code requires, among other things, that such plan be proposed in good faith, that the proponent of such plan disclose specified information concerning payments made or promised to insiders and that such plan comply with the applicable provisions of chapter 11 of the Code. Section 1129(a) of the Code also imposes requirements that each dissenting member of a class receive at least as much under the plan as it would receive in a chapter 7 liquidation of the debtor, that at least one class of impaired claims has accepted the plan, that confirmation of the plan is not likely to be followed by the need for further financial reorganization and that the plan is "fair and equitable" with respect to each class of claims or interests that is impaired under the plan and fails to accept the Plan by the required majorities. The bankruptcy court will confirm a plan only if it finds that all of the applicable requirements enumerated in Section 1129(a) of the Code have been met or, if all of the requirements of Section 1129(a) other than the requirements of Section 1129(a)(8) have been met (I.E., that all impaired classes have accepted the plan), that all of the applicable requirements enumerated in Section 1129(b) of the Code have been met. In particular, Section 1129(a) of the Code provides that: 1. The plan must comply with the applicable provisions of the Code. 2. The proponent of the plan must comply with the applicable provisions of the Code. 3. The plan must be proposed in good faith and not by any means forbidden by law. 4. Any payment made or to be made by the proponent, by the debtor or by a person issuing securities or acquiring property under the plan, for services or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, must have been approved by, or be subject to the approval of, the court as reasonable. 5. The proponent of the plan must disclose the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer or voting trustee of the debtor, an affiliate of the debtor participating in a joint plan with the debtor or a successor to the debtor under the plan; and (a) the appointment to, or continuance in, such office of such individual must be consistent with the interests of creditors and equity security holders and with public policy; and 105 (b) the proponent of the plan must disclose the identity of any insider that will be employed or retained by the reorganized debtor, and the nature of any compensation for such insider. 6. Any governmental regulatory commission with jurisdiction, after confirmation of the plan, over the rates of the debtor must have approved any rate change provided for in the plan, or such rate change must be expressly conditioned on such approval. 7. With respect to each impaired class of claims or interests: (a) each holder of a claim or interest of such class (i) must have accepted the plan; or (ii) must receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the debtor were liquidated under chapter 7 of the Code on such date; or (b) if Section 1111(b)(2) of the Code applies to the claims of such class, each holder of a claim of such class must receive or retain under the plan on account of such claim property of a value, as of the effective date of the plan, that is not less than the value of such holder's interest in the estate's interest in the property that secures such claim. 8. With respect to each class of claims or interests: (a) such class must have accepted the plan; or (b) such class must not be impaired under the plan. 9. Except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan must provide that: (a) with respect to a claim of a kind specified in Section 507(a)(1) or 507(a)(2) of the Code, on the effective date of the plan, the holder of such claim will receive on account of such claim cash equal to the allowed amount of such claim; (b) with respect to a class of claims of a kind specified in Section 507(a)(3), 507(a)(4), 507(a)(5), 507(a)(6) and 106 507(a)(7) of the Code, each holder of a claim of such class will receive (i) if such class has accepted the plan, deferred cash payments of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or (ii) if such class has not accepted the plan, cash on the effective date of the plan equal to the allowed amount of such claim; and (c) with respect to a claim of a kind specified in Section 507(a)(8) of the Code, the holder of such claim must receive on account of such claim deferred cash payments, over a period not exceeding six years after the date of assessment of such claim, of a value, as of the effective date of the plan, equal to the allowed amount of such claim. 10. If a class of claims is impaired under the plan, at least one class of claims that is impaired under the plan must have accepted the plan, determined without including any acceptance of the plan by any insider. 11. Confirmation of the plan must not be likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is proposed in the plan. 12. All fees payable under Section 1930 of Title 28, as determined by the court at the hearing on confirmation of the plan, must have been paid or the plan must provide for the payment of all such fees on the effective date of the plan. 13. The plan must provide for the continuation after its effective date of payment of all retiree benefits, as that term is defined in Section 1114 of the Code, at the level established pursuant to Subsection (e)(1)(B) or (g) of Section 1114 of the Code, at any time prior to confirmation of the plan, for the duration of the period the debtor has obligated itself to provide such benefits. THE DEBTORS BELIEVE THAT THE PLAN SATISFIES OR WILL SATISFY, AS OF THE CONFIRMATION DATE, ALL OF THE REQUIREMENTS FOR CONFIRMATION. 107 C. SATISFACTION OF CONDITIONS PRECEDENT TO CONFIRMATION UNDER THE CODE 1. ACCEPTANCE BY IMPAIRED CLASSES By this First Amended Disclosure Statement, the Debtors are seeking the affirmative vote of each impaired Class of Claims under the Plan that is proposed to receive a distribution under the Plan. Pursuant to Section 1126(f) of the Code, a class that is not "impaired" under a plan will be conclusively presumed to have accepted such plan; solicitation of acceptances with respect to any such class is not required. Pursuant to Section 1126(g) of the Code, a class of claims or interests that does not receive or retain any property under a plan of reorganization is deemed not to have accepted the plan, although members of that class are permitted to consent, or waive object, to its confirmation. Pursuant to Section 1124 of the Code, a class is "impaired" unless the plan (a) leaves unaltered the legal, equitable and contractual rights to which the claim or interest entitles the holder thereof, or (b) (i) cures any default (other than defaults resulting from the breach of an insolvency or financial condition provision), (ii) reinstates the maturity of such claim or interest, (iii) compensates the holder of such claim or interest for any damages incurred as a result of any reasonable reliance by such holder on any contractual provision or applicable law entitling such holder to demand or receive accelerated payments after the occurrence of a default and (iv) does not otherwise alter the legal, equitable or contractual rights to which the holder of such claim or interest is entitled. Pursuant to Section 1126(c) of the Code, a class of impaired claims has accepted a plan of reorganization when such plan has been accepted by creditors (other than an entity designated under Section 1126(e) of the Code) that hold at least two-thirds in dollar amount and more than one-half in number of the allowed claims of such class held by creditors (other than any entity designated under Section 1126(e) of the Code) that have actually voted to accept or reject the plan. A class of interests has accepted a plan if the plan has been accepted by holders of interests (other than any entity designated under Section 1126(e) of the Code) that hold at least two-thirds in amount of the allowed interests of such class held by interest holders (other than any entity designated under Section 1126(e) of the Code) that have actually voted to accept or reject the plan. Section 1126(e) of the Code allows the bankruptcy court to designate the votes of any party that did not vote in good faith or whose vote was not solicited or procured in good faith or in accordance with the Code. Holders of claims or interests who fail to vote are not counted as either accepting or rejecting the plan. 2. BEST INTERESTS OF CLAIM HOLDERS (a) GENERALLY. Even if a plan is accepted by each class of Claim holders and Interest holders, the Code requires a bankruptcy court to determine that the plan is in the best interests of all Claim holders and Interest holders that are impaired by the Plan and have not accepted the Plan. Specifically, Section 1129(a)(7) of the Code requires, with respect to each impaired class, that each holder of an allowed 108 claim or interest in such class either (a) has accepted the plan or (b) will receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of such plan, that is not less than the amount that such person would receive or retain if the debtor were liquidated under chapter 7 of the Code on the effective date. This is the so-called "best interests test." This test considers, hypothetically, the fair salable value of a debtor's assets through liquidation in a chapter 7 bankruptcy proceeding and the costs that would be incurred and the additional liabilities that would arise in such proceeding. The hypothetical chapter 7 return to creditors is then calculated, giving effect to secured claims, distribution priorities established by the Code that apply in a chapter 7 proceeding and subordination agreements. The first step in meeting this test is to determine the dollar amount that would be generated from the liquidation of the Debtors' assets and properties in the context of a chapter 7 liquidation case. The total cash available would be the sum of the proceeds (net of transaction costs) from the disposition of the Debtors' assets and the cash held by the Debtors at the time of the commencement of the chapter 7 case. The next step would be to reduce that total by the amount of any claims secured by such assets, the costs and expenses of the liquidation and such additional administrative expenses and priority claims that may result from the termination of the Debtors' business and the use of chapter 7 for the purposes of liquidation. Next, any remaining cash would be allocated to creditors and shareholders in strict priority in accordance with Section 726 of the Code. Finally, the present value of such allocations (taking into account the time necessary to accomplish the liquidation) would be compared to the value of the property that is proposed to be distributed under the Plan on the Effective Date. The Debtors' costs of liquidation under chapter 7 would include the fees payable to a trustee in bankruptcy, as well as those that would be payable to attorneys and other professionals that such a trustee would engage, plus any unpaid expenses incurred by the Debtors during their chapter 11 cases and allowed in the chapter 7 case. These expenses could include compensation for attorneys, financial advisors, appraisers, accountants and other professionals, and costs and expenses of members of the statutory committee of unsecured creditors appointed by the United States Trustee pursuant to Section 1102 of the Code and any other committee so appointed. In addition, claims would arise by reason of the breach or rejection of obligations incurred and executory contracts entered into by the Debtors both prior to, and during the pendency of, the chapter 11 cases, which would either take precedence (in the case of post-petition obligations) or dilute the recoveries available for unsecured creditors. The foregoing types of claims, costs, expenses and fees and such other claims that may arise in a liquidation case or result from the pending chapter 11 cases would be paid in full from the liquidation proceeds before the balance of those proceeds would be made available to pay pre-chapter 11 priority and unsecured claims. As more fully described in Section IV.D.3. hereof, entitled "Treatment of Classified Claims and Interests" Claims and Interests in Classes 3, 4, 5 and 6 of the Plan are impaired and either (i) the holders of such Claims will receive partial or no 109 distributions under the Plan and/or (ii) the legal, equitable and contractual rights to which such Claims entitle the holders of such Claims will be altered. Therefore, if any holder of a Claim or Interest in Classes 3 and 4 does not accept the Plan, the "best interests test" must be satisfied with respect to such Class(es). In addition, because the holders of Class 6 Claims and Interests are deemed not to have accepted the Plan, the "best interests test" must be satisfied with respect to Class 6. To determine if the Plan is in the best interests of holders of such Claims or Interests, it is necessary to compare the value of distributions offered to such holders of Claims or Interests under the Plan with the value of distributions to such holders from proceeds of a hypothetical chapter 7 liquidation, less the estimated costs and expenses attributable thereto. THE DEBTORS BELIEVE THAT THE MEMBERS OF EACH CLASS OF IMPAIRED CLAIMS AND INTERESTS WILL RECEIVE NOT LESS UNDER THE PLAN THAN THEY WOULD RECEIVE IF THE DEBTORS WERE LIQUIDATED UNDER CHAPTER 7. (b) ENTERPRISE VALUATION OF THE REORGANIZED DEBTORS. For purposes of evaluating whether the Plan satisfies the "best interests test," the Debtors determined that it was necessary to estimate the post-confirmation going concern value of the Reorganized Debtors. The Debtors asked their financial advisor, PJSC, to prepare a valuation analysis of the Reorganized Debtors. The range of values for the Reorganized Debtors set forth below was based on information available as of December 17, 2004. This estimate was developed solely for purposes of formulation and negotiation of a plan of reorganization and analysis of implied relative recoveries to creditors thereunder. The calculation of value does not address any other aspect of the proposed restructuring or any related transactions and does not constitute a recommendation to any holder of outstanding securities of the Debtors as to how such security holder should vote or act on any matter relating to the restructuring or any related transaction. In addition, PJSC's calculation of value does not constitute an opinion as to the fairness to holders of outstanding securities of the Debtors from any point of view, including a financial point of view of the consideration to be received by such security holders pursuant to the Plan. Estimates of reorganization value do not purport to reflect or constitute appraisals, liquidation values or estimates of the actual market value that may be realized through the sale of any securities to be issued pursuant to the Plan, which may be significantly different from the amounts set forth herein. In preparing the analysis, PJSC, among other things: (1) reviewed certain internal financial and operating information of the Debtors, including historical actual and pro forma unaudited financial information based on 109 core stores and the sale-leaseback of all of its distribution centers; (2) reviewed and discussed with Debtors' management and KZCS, the Debtors' Projections attached hereto as EXHIBIT E and the Debtors' assumptions underlying the Projections and any adjustment made for extraordinary or one time financial items; (3) discussed the past and current operations, financial conditions and prospects of the Debtors with the Debtors' management and KZCS; (4) compared the financial performance and condition of the Debtors with that of 110 certain comparable publicly traded companies; (5) considered the market values of publicly traded companies that PJSC believes reasonably comparable to the Reorganized Debtors' operating business; (6) performed discounted cash flow analyses based on the Projections; (7) considered certain economic and industry information relevant to the operating business of the Reorganized Debtors; and (8) made such other analyses as PJSC deemed necessary or appropriate for the purposes of its valuation. In preparing its analysis, PJSC assumed and relied upon the accuracy and completeness of all of the financial and other information available to it from public sources and that was provided by the Debtors or their representatives, and has not assumed any responsibility for the independent verification of any such information. With respect to the financial Projections prepared by the Debtors, PJSC assumed the accuracy thereof and that such Projections have been prepared in good faith and on a basis reflecting the best currently available estimates and judgments of the Debtors as to the future operating and financial performance of the Reorganized Debtors. PJSC did not make or obtain any independent valuation of the Reorganized Debtors' assets or liabilities, nor did PJSC independently verify any of the information it reviewed and relied upon in preparing its analyses. Further, PJSC did not assume any obligation to conduct any physical inspection of the properties or facilities of the Debtors. The enterprise valuation does not take into account potential values of the Reorganized Debtors in a merger of the business combination transaction involving the Debtors or their assets. In determining an enterprise valuation for the Reorganized Debtors, PJSC made the following assumptions: o The Reorganized Debtors' enterprise valuation consists of the aggregate enterprise value of all of Penn Traffic's subsidiaries upon emergence from chapter 11. o The equity valuation range assumes certain pro forma debt levels based on the Projections attached hereto as EXHIBIT E) and includes certain assumptions regarding the Debtors' liabilities with respect to their single employer pension plans (excluding the Cash Balance Pension Plan) and their multi-employer pension plans, as discussed with KZCS. o The Debtors will emerge from chapter 11 on or about March 31, 2005. o Reorganized Debtors' emergence from bankruptcy will take place as set forth in the First Amended Joint Plan of Reorganization. o The Projections for the Reorganized Debtors are predicated upon the assumption that the Debtors will be able to obtain the necessary financing to emerge from chapter 11, and that no substantial asset sales or other financial transactions are consummated by the Debtors prior to the Effective Date. 111 o The general economic market and other conditions as in effect on the assumed Effective Date as per the First Amended Joint Plan of Reorganization will not differ materially from those conditions prevailing as of the date hereof. Based upon the foregoing analyses, reviews, discussions, considerations and assumptions, PJSC estimates that the enterprise value of the Reorganized Debtors is in the range of $175 million to $215 million, and that the equity value of the Reorganized Debtors is in the range of $103 million to $143 million. THESE ESTIMATED VALUES ARE PREMISED UPON MANY FACTORS THAT ARE SUBJECT TO CHANGE, INCLUDING, WITHOUT LIMITATION, CONDITIONS IN THE CAPITAL MARKETS AND THE DEBTORS' PROJECTIONS. TO THE EXTENT THAT ANY OR ALL OF THE FACTORS CONSIDERED BY PJSC MATERIALLY CHANGE, THE ESTIMATED VALUES MAY CHANGE SUBSTANTIALLY. AS A RESULT, THE ESTIMATE OF THE COMPONENTS THAT ULTIMATELY DERIVE THE EQUITY VALUE OF THE REORGANIZED DEBTORS AS DESCRIBED HEREIN ARE NOT NECESSARILY INDICATIVE OF ACTUAL OUTCOMES, AND COULD BE SIGNIFICANTLY MORE OR LESS FAVORABLE THAN THOSE SET FORTH HEREIN. SINCE SUCH ESTIMATES ARE INHERENTLY SUBJECT TO UNCERTAINTIES, NEITHER PJSC, KZCS, THE DEBTORS, NOR ANY OTHER PERSON ASSUMES RESPONSIBILITY FOR THEIR ACCURACY. THE CALCULATIONS OF VALUE SET FORTH HEREIN REPRESENT ESTIMATED REORGANIZATION VALUES AND DO NOT NECESSARILY REFLECT VALUES THAT COULD BE ATTAINABLE IN PUBLIC OR PRIVATE MARKETS. NO RESPONSIBILITY IS TAKEN FOR CHANGES IN MARKET CONDITIONS AND NO OBLIGATION IS ASSUMED TO REVISE THIS CALCULATION OF VALUE OF THE REORGANIZED DEBTORS TO REFLECT EVENTS OR CONDITIONS WHICH SUBSEQUENTLY OCCUR. (c) LIQUIDATION VALUE OF THE DEBTORS. Attached hereto as EXHIBIT G is a liquidation analysis of the Debtors (the "LIQUIDATION ANALYSIS") that has been prepared using information as of the date of this First Amended Disclosure Statement, and indicates the net present value that would be allocated to creditors of the Debtors in strict priority in accordance with Section 726 of the Code. The following is a summary of the sources and application of proceeds of a hypothetical chapter 7 liquidation of the Debtors: 112 $ MILLIONS ---------- Gross Proceeds from Liquidation of Assets $213 - $259 LESS Administrative Expenses of Liquidation ($17 - $18) Adjusted Gross Proceeds from Liquidation $196 - $241 LESS REPAYMENT OF DIP FACILITY ($92) ------------------------------ ----------- NET PROCEEDS AVAILABLE TO CREDITORS $104 - $149 =========== As indicated in the Liquidation Analysis, the Debtors believe that the net cash proceeds that would be available in a hypothetical chapter 7 liquidation would total approximately $104 - $149 million. Underlying the Liquidation Analysis are a number of estimates and assumptions that are inherently subject to significant uncertainties. There can be no assurance that the recoveries shown, and Liquidation Value indicated, in this analysis would be realized if the Debtors were, in fact, to undergo such a liquidation. The Debtors' Liquidation Analysis assumes that their assets would be broken up and sold by a chapter 7 trustee or its duly appointed advisors, brokers or liquidators, irrespective of their current use. Some of the Debtors' assets when broken up may not be able to be sold or may realize minimal proceeds. The estimated liquidation value of the Debtors' assets, net of transaction costs and discounted to take account of the estimated time it might take to dispose of such assets, are set forth in the Liquidation Analysis. The costs associated with a chapter 7 liquidation of the Debtors, including the fees that would be associated with a chapter 7 trustee, are anticipated to be significant. Estimates of the major elements of such costs are set forth in the Liquidation Analysis. (d) APPLICATION OF THE BEST INTERESTS TEST. As indicated above, to determine if the Plan is in the best interests of the holders of impaired Claims and Interests, I.E., holders of Allowed Unsecured Claims in Class 3, holders of Allowed Convenience Claims in Class 4 and the holders of Common Stock Claims and Interests in Class 6, it is necessary to compare the value of distributions offered to such holders of Claims and Interests under the Plan with the value of distributions to such holders from the net proceeds of a hypothetical chapter 7 liquidation. (i) CLASS 3 ALLOWED UNSECURED CLAIMS. Pursuant to Section 2.8. of the Plan, Class 3 consists of holders of Unsecured Claims, the Allowed amount of which is estimated by the Debtors to be between $295 - $305 million. Under the Plan each holder of an Allowed Class 3 Claim is to receive (i) its PRO RATA share of 100% of the New Penn Traffic Common Shares subject to (a) dilution resulting from the issuance of additional New Penn Traffic Common Shares upon the exercise of options 113 to purchase New Penn Traffic Common Shares granted to management of Reorganized Penn Traffic pursuant to the Management Stock Incentive Program and (b) such adjustments to the total issued New Penn Traffic Common Shares as may occur pursuant to Section 6.3.(A) of the Plan and (ii) its PRO RATA share of all Trust Recoveries, if any. The estimated aggregate value of this distribution to holders of Allowed Class 3 Claims under the Plan is between $103 - $143 million. Assuming for illustration purposes a midpoint value of $300 million for estimated Allowed Class 3 Claims and a midpoint aggregate value of $123 million for distribution to holders of Allowed Class 3 Claims, the Debtors estimate a 41% recovery by holders of Allowed Class 3 Claims. By contrast, in view of estimated additional landlord lease rejection claims and estimated $98 million of company sponsored and multiemployer pension liabilities associated with distress terminations in a chapter 7 liquidation, the holders of Allowed Class 3 Claims likely would receive no more than 9% recovery in a chapter 7 liquidation. (ii) CLASS 4 CONVENIENCE CLASS CLAIMS. Pursuant to Section 2.9. of the Plan, Class 4 consists of holders of any Allowed Unsecured Claim against any Debtor, including Claims of beneficial holders of Senior Notes, that is either (i) equal to or less than $5,000.00, or (ii) reduced to $5,000.00 pursuant to an election made on the Ballot by the holder of such Unsecured Claim, and, therefore, is included in Class 4 under the Plan, the Allowed amount of which is estimated by the Debtors to be $3.1 million. Under the Plan each holder of an Allowed Convenience Claim will receive Cash equal to 15% of its Allowed Claim against the Debtors; PROVIDED, HOWEVER, that a holder of more than one Allowed Convenience Claim, which Claims in the aggregate exceed $5,000.00 may elect to be treated with respect to and in the amount of such aggregated Claim, as a Class 3 Claimholder for distribution purposes only. By contrast, in view of estimated additional landlord lease rejection claims and estimated $98 million of company sponsored and multiemployer pension liabilities associated with distress terminations in a chapter 7 liquidation, the holders of Allowed Class 4 Claims likely would receive no more than 9% recovery in a chapter 7 liquidation. (iii) CLASS 6 COMMON STOCK CLAIMS AND INTERESTS. Pursuant to Section 2.11.(B) of the Plan, holders of Common Stock Claims and Interests are not entitled to receive or retain any property on account of such Claims and Interests under the Plan. Likewise, in view of the priority and amount of the Claims in Classes 3 and 4, Common Stock Claims and Interests in Class 6 would receive no distributions in a chapter 7 proceeding. (iv) BEST INTERESTS TEST CONCLUSION. After consideration of the effects that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors in the Cases, including (a) 114 the increased costs and expenses of a liquidation under chapter 7 arising from fees payable to a trustee in bankruptcy and professional advisors to such trustee, (b) the erosion in value of the Debtors' assets in a chapter 7 case in the context of the expeditious liquidation required under chapter 7 and the "forced sale" atmosphere that would prevail, (c) the adverse effects on the saleability of the Debtors' assets resulting from the departure of key employees and the loss of customers and suppliers, (d) substantial increases in claims that would be satisfied on a priority basis or on a priority with creditors in the Cases and (e) the substantial time that would elapse to complete the liquidation process and, therefore, before which creditors would receive any distributions with respect to their Claims, the Debtors believe that confirmation of the Plan will provide each creditor with a recovery that is not less, and, in some cases, most likely considerably greater, than the distribution received in a chapter 7 liquidation proceeding, as summarized below: ESTIMATED RECOVERY ESTIMATED RECOVERY IMPAIRED CLASS UNDER THE PLAN IN A LIQUIDATION - -------------- -------------- ---------------- Class 3 40% - 42% 0% - 9% Class 4 15% 0% - 9% Class 5 N/A N/A Class 6 0% 0% Therefore, the Debtors believe that confirmation of the Plan is in the best interests of their creditors and equity security holders, satisfying the requirements of Section 1129(a)(7) of the Code. 3. FEASIBILITY OF THE PLAN Pursuant to Section 1129(a)(11) of the Code, among other things, the Bankruptcy Court must determine that confirmation of a plan of reorganization is not likely to be followed by the liquidation or need for further financial reorganization of the Debtors or any successors to the Debtors under the Plan. The Debtors believe that the Plan satisfies this requirement. To demonstrate the feasibility of the Plan, the Debtors have prepared the Projections comprised of pro forma projected results of operations, balance sheets and statements of cash flow for the fiscal years 2005 - 2008, which are attached hereto as EXHIBIT E. The Projections indicate that the Reorganized Debtors should have more than sufficient cash flow to pay and service their debt obligations, and to fund their ongoing operations as contemplated by their business plan. Thus, the Projections demonstrate that confirmation of the Plan will not likely be followed by the need to further reorganize or liquidate the Reorganized Debtors. However, the assumptions used in preparing the Projections are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Debtors' control. There generally will be a difference between projections of future performance and actual results because 115 certain events and circumstances may not occur as expected. These differences could be material. While the Debtors believe the Projections presented in EXHIBIT E are reasonable, there can be no assurance that such Projections will be realized. Consequently, the Projections included therein should not be regarded as a representation by the Debtors or their advisors or any other person that the projected results will be achieved. In considering the Projections attached hereto and contained herein, holders of Claims and Interests should be mindful of the inherent risk in developing projections for the future, particularly given the competitive industry in which the Reorganized Debtors will conduct their business. THE PROJECTIONS WERE NOT PREPARED IN COMPLIANCE WITH (I) PUBLISHED GUIDELINES OF THE SEC, (II) THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS OR (III) GAAP. PETER J. SOLOMON COMPANY, INVESTMENT BANKER AND FINANCIAL ADVISORS TO THE DEBTORS, DID NOT PARTICIPATE IN THE PREPARATION OF OR COMPILE SUCH PROJECTIONS AND, ACCORDINGLY, DOES NOT EXPRESS ANY VIEW, OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT TO, ASSUMES NO RESPONSIBILITY FOR AND DISCLAIMS ANY ASSOCIATION WITH, SUCH PROJECTIONS. IN CONNECTION WITH ITS ENTERPRISE VALUATION OF THE REORGANIZED DEBTORS, PETER J. SOLOMON COMPANY, DID, HOWEVER, REVIEW SELECTED ASSUMPTIONS UNDERLYING THE PROJECTIONS. SEE SECTION VI.C.2.(b), ENTITLED "BEST INTERESTS OF CLAIM HOLDERS - ENTERPRISE VALUATION OF THE REORGANIZED DEBTORS." WHILE PRESENTED WITH NUMERICAL SPECIFICITY , SUCH PROJECTIONS ARE BASED UPON A VARIETY OF ASSUMPTIONS, WHICH MAY NOT BE REALIZED, RELATING TO THE FUTURE BUSINESS AND OPERATIONS OF THE DEBTORS AND ARE SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE DEBTORS. THE DEBTORS DO NOT MAKE ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO THE ATTAINABILITY OF THE PROJECTED FINANCIAL INFORMATION SET FORTH IN THE PROJECTIONS OR AS TO THE ACCURACY OR COMPLETENESS OF THE ASSUMPTIONS FROM WHICH THAT PROJECTED INFORMATION IS DERIVED. 4. CONFIRMATION WITHOUT ACCEPTANCE BY ALL IMPAIRED CLASSES ("CRAMDOWN") Section 4.3. of the Plan provides that because Class 5 and Class 6 are deemed not to have accepted the Plan pursuant to Section 1126(g) of the Code, as to such Classes, as well as to any other Class that votes to reject the Plan, the Debtors are seeking confirmation of the Plan pursuant to Section 1129(b) of the Code. Section 1129(b) of the Code, referred to as the "cramdown" provision, provides that the Bankruptcy Court may still confirm a plan at the request of the debtor if, as to each impaired class that has not accepted the plan, the plan "does not discriminate unfairly" and is "fair and equitable." 116 In general, a plan does not discriminate unfairly within the meaning of the Code if a dissenting class is treated equally with respect to other classes of equal rank and is not treated less favorably than classes of junior rank. Section 1129(b)(2)(A) of the Code provides that with respect to a non-accepting class of impaired secured claims, "fair and equitable" includes the requirement that the plan provides: (a) that each holder of a claim in such class (i) retains the liens securing its claim to the extent of the allowed amount of such claim and (ii) receives deferred cash payments at least equal to the allowed amount of its claim with a present value as of the effective date of such plan at least equal to the value of such creditor's interest in the debtor's interest in the property securing the creditor's claim; (b) for the sale, subject to Section 363(k) of the Code, of the property securing the creditor's claim, free and clear of the creditor's liens, with those liens attaching to the proceeds of the sale, and such liens on the proceeds will be treated in accordance with clauses (a) or (c) hereof; or (c) for the realization by the creditor of the "indubitable equivalent" of its claim. Section 1129(b)(2)(B) of the Code provides that with respect to a non-accepting class of impaired unsecured claims, "fair and equitable" includes the requirement that: (a) the plan provide that each holder of a claim in such class receives or retains property of a value as of the effective date equal to the allowed amount of its claim; or (b) the holders of claims or interests in classes that are junior to the claims of the dissenting class will not receive or retain any property under the plan on account of such junior claim or interest. Section 1129(b)(2)(C) of the Code provides that with respect to a non-accepting class of impaired equity interests, "fair and equitable" includes the requirement that (a) the plan provides that each holder of an impaired interest in such class receives or retains property of a value as of the effective date equal to the greatest of (i) the allowed amount of any fixed liquidation preference to which such holder is entitled, (ii) any fixed redemption price to which such holder is entitled and (iii) the value of such interest or (b) the holders of all interests that are junior to the interests of the dissenting class will not receive or retain any property under the plan on account of such junior interest. The Debtors believe that the Plan does not discriminate unfairly against, and is fair and equitable as to, each impaired Class under the Plan because the creditors and interest holders in each such Class are treated equally with respect to other classes of equal rank and are not treated less favorably than junior classes. 117 VII. ALTERNATIVES TO THE PLAN The Debtors believe that the Plan is the optimal means of providing maximum recoveries to their creditors. THE CREDITORS' COMMITTEE SUPPORTS THE PLAN AND WILL RECOMMEND TO ALL HOLDERS OF CLAIMS THAT THEY VOTE TO ACCEPT THE PLAN. Alternatives to the Plan include: (a) liquidation of the Debtors' assets under chapter 7 of the Code; and (b) an alternative chapter 11 plan providing for (i) a sale of some or all of the Debtors' assets, or (ii) an internal reorganization different than the Plan. As more fully described herein in Section VI.C.2. hereof, entitled "Best Interests of Claim Holders," the Debtors have determined that confirmation of the Plan will provide each creditor and equity security holder with a recovery that is greater than or equal to that which it would receive pursuant to a liquidation of the Debtors under chapter 7 of the Code. Therefore, the Debtors have concluded that confirmation of the Plan, rather than a chapter 7 liquidation of the Debtors, is in the best interests of their creditors. During the pendency of the Cases, the Debtors have engaged in a sale process to explore the possible values they might realize from a sale of some or all of their businesses, compared with stand-alone values. The Debtors received certain indications of interest with respect to a sale of all or a portion of the Debtors' business. The Debtors have responded as appropriate to such inquiries, which have not produced any acceptable merger or sale offers. Based upon consultation with the Debtors' professionals and the evaluation and business judgment of the Debtors' management and Board of Directors, the Debtors believe that no merger or sale opportunities for some or all of the Debtors' assets are available that would result in greater recoveries for the Debtors' creditors than the distributions provided for in the Plan. Similarly, the Debtors believe that confirmation of the Plan, as opposed to some other plan of reorganization formulated over time, provides the greatest and most certain recoveries to the Debtors' creditors within a reasonable time period. If the Plan is not confirmed, the Debtors (or other parties-in-interest) could attempt to formulate an alternative chapter 11 plan. Any attempt to formulate an alternative chapter 11 plan will necessarily delay creditors' receipt of any distributions from the Debtors, will result in the incurrence of ongoing substantial administrative expenses during the period of delay, and could result in the deterioration of the Debtors' business caused by a prolonged stay in chapter 11. Accordingly, the Debtors believe that the Plan will enable creditors to realize the greatest possible recovery on their Claims with the least delay and expense. In general, following careful and thorough consideration and evaluation of the alternatives, the Debtors have concluded that the Plan provides the greatest and most certain recoveries to creditors on a more expeditious timetable, and in a manner that minimizes certain risks in any other course of action available in these Cases. 118 VIII. RECOMMENDATION The Debtors believe that confirmation of the Plan is preferable to the available alternatives because it provides a greater and more timely distribution to Creditors than would otherwise result. In addition, any alternative to confirmation of the Plan could result in extensive delays and increased administrative expenses resulting most likely in smaller distributions, or no distributions, to the holders of Claims in the Cases. THE CREDITORS' COMMITTEE SUPPORTS THE PLAN AND WILL RECOMMEND TO ALL HOLDERS OF CLAIMS THAT THEY VOTE TO ACCEPT THE PLAN. IX. CONCLUSION The Debtors urge all holders of Claims that are or may be impaired under the Plan to vote to accept the Plan and to evidence such acceptance by returning their Ballots so that they will be timely received. Respectfully submitted this 4th day of February 2005. THE PENN TRAFFIC COMPANY SUNRISE PROPERTIES, INC. PENNWAY EXPRESS, INC. DAIRY-DELL, INC. BIG BEAR DISTRIBUTION COMPANY PENNY CURTISS BAKING COMPANY BRADFORD SUPERMARKETS, INC. P&C FOOD MARKETS, INC. OF VERMONT ABBOTT REALTY CORPORATION BIG M SUPERMARKETS, INC. COMMANDER FOODS, INC. PT DEVELOPMENT, LLC PT FAYETTEVILLE/UTICA, LLC Debtors and Debtors-in-Possession By: /s/ Robert J. Chapman --------------------------------------- Robert J. Chapman President and Chief Executive Officer of The Penn Traffic Company and Authorized Signatory 119
TABLE OF CONTENTS PAGE INTRODUCTORY STATEMENT/DISCLAIMER..........................................................i I. EXECUTIVE SUMMARY....................................................................1 A. OVERVIEW OF CHAPTER 11 FILING....................................................1 B. THE FIRST AMENDED DISCLOSURE STATEMENT; VOTING REQUIREMENTS......................2 C. SOURCES OF INFORMATION...........................................................4 D. GENERAL STRUCTURE OF THE PLAN....................................................5 E. SUMMARY OF THE TREATMENT UNDER THE PLAN OF HOLDERS OF CLAIMS AND INTERESTS.......7 F. CONDITIONS TO EFFECTIVENESS OF THE PLAN.........................................11 II. DESCRIPTION OF THE DEBTORS AND THE DEBTORS' BUSINESSES..............................11 A. BACKGROUND INFORMATION REGARDING THE DEBTORS....................................11 1. OVERVIEW OF HISTORY AND OPERATIONS.........................................11 2. PRE-PETITION CAPITAL STRUCTURE.............................................20 B. EVENTS LEADING TO COMMENCEMENT OF THE CHAPTER 11 CASES..........................22 1. OVERVIEW...................................................................22 2. AMENDMENT TO THE CREDIT FACILITY...........................................23 C. THE CHAPTER 11 CASES............................................................24 1. OVERVIEW OF THE DEBTORS' OPERATIONS IN CHAPTER 11..........................24 2. THE DIP FACILITY...........................................................27 3. EMPLOYEES..................................................................28 4. CLAIMS BAR DATE AND LAST DATE TO FILE PROOFS OF CLAIMS.....................29 5. RECLAMATION PROCEDURES ORDER...............................................29 6. TRADE LIEN PROGRAM.........................................................30 7. PLAN EXCLUSIVITY...........................................................31 8. THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS..............................31 9. MANAGEMENT.................................................................32 10. RESTRUCTURING OF THE DEBTORS' BUSINESSES...................................33 11. ASSUMPTION AND REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.......36 12. GOVERNMENT INVESTIGATIONS..................................................39 13. DEVELOPMENT OF BUSINESS PLAN...............................................39 14. THE PBGC SETTLEMENT........................................................40 15. CURRENT OFFICERS AND DIRECTORS.............................................44 III. FUTURE BUSINESS OF THE REORGANIZED DEBTORS..........................................49 A. STRUCTURE AND BUSINESS OF THE REORGANIZED DEBTORS...............................49 B. EXECUTIVE OFFICERS AND DIRECTORS OF THE REORGANIZED DEBTORS.....................49 C. PROJECTED FINANCIAL INFORMATION.................................................49 1. RISK FACTORS...............................................................50
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IV. SUMMARY OF THE PLAN OF REORGANIZATION...............................................56 A. INTRODUCTION....................................................................57 B. BRIEF EXPLANATION OF CHAPTER 11 PLAN OF REORGANIZATION..........................57 C. SUBSTANTIVE CONSOLIDATION.......................................................58 D. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS............................61 1. GENERAL....................................................................61 2. TREATMENT OF UNCLASSIFIED CLAIMS...........................................63 3. TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS...............................65 E. CONDITIONS TO EFFECTIVE DATE....................................................68 F. EXECUTORY CONTRACTS AND UNEXPIRED LEASES........................................68 1. GENERAL....................................................................68 2. ASSUMPTION AND REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES......69 3. PAYMENTS RELATED TO ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES ....................................................................70 4. POST-PETITION CONTRACTS AND LEASES.........................................71 5. REJECTION DAMAGES BAR DATE.................................................71 G. IMPLEMENTATION OF THE PLAN......................................................71 1. PRE-EFFECTIVE DATE MANAGEMENT AND OPERATION OF DEBTORS.....................71 2. POST-EFFECTIVE DATE COMMITTEE; DISSOLUTION OF COMMITTEE....................71 3. MERGER OF CERTAIN DEBTORS..................................................73 4. AMENDED CERTIFICATES OF INCORPORATION AND AMENDED BYLAWS...................73 5. POST-EFFECTIVE DATE MANAGEMENT AND OPERATION OF REORGANIZED DEBTORS......73 6. REPAYMENT OF DIP FACILITY/EXIT FINANCING/ SALE-LEASEBACK TRANSACTION......73 7. ISSUANCE OF NEW PENN TRAFFIC COMMON SHARES.................................75 8. MANAGEMENT STOCK INCENTIVE PROGRAM.........................................75 9. CONTINUATION OF PENN TRAFFIC'S PENSION PLANS...............................75 10. EMPLOYMENT, RETIREMENT, AND INCENTIVE COMPENSATION PLANS AND PROGRAMS....76 11. POST-EFFECTIVE DATE TRADE LIEN PROGRAM; CREDITOR SUBORDINATION PROVISION.76 12. EXEMPTION FROM CERTAIN TRANSFER AND OTHER TAXES............................77 13..............................................................................77 13. THE PENN TRAFFIC CREDITOR TRUST............................................78 14..............................................................................78 H. DISTRIBUTIONS UNDER THE PLAN....................................................81 1. DISTRIBUTIONS..............................................................81 I. PROCEDURE FOR DETERMINATION OF CLAIMS AND INTERESTS.............................87 1. BAR DATE FOR CERTAIN ADMINISTRATIVE CLAIMS.................................87 2. OBJECTIONS TO CLAIMS.......................................................88 J. EFFECT OF THE PLAN ON CLAIMS AND INTERESTS......................................88 1. REVESTING OF ASSETS........................................................88 2. DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS...........................88
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3. INJUNCTIONS................................................................89 4. LIMITATION OF LIABILITY....................................................90 5. RELEASES...................................................................90 K. MISCELLANEOUS PROVISIONS........................................................92 1. RETENTION OF JURISDICTION..................................................92 2. RETENTION AND ENFORCEMENT OF CAUSES OF ACTION..............................94 3. CONFIRMATION ORDER AND PLAN CONTROL........................................95 4. SEVERABILITY...............................................................95 5. MODIFICATIONS TO THE PLAN..................................................95 6. REVOCATION, WITHDRAWAL OR NON-CONSUMMATION.................................95 L. EXEMPTION FROM SECURITIES LAWS..................................................96 1. CODE EXEMPTION FROM REGISTRATION REQUIREMENTS..............................96 V. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.............................................98 A. CONSEQUENCES TO CREDITORS.......................................................99 1. TAX SECURITIES.............................................................99 2. CLAIMS AND CONSIDERATION CONSTITUTING TAX SECURITIES......................100 3. CLAIMS NOT CONSTITUTING TAX SECURITIES....................................100 B. CONSEQUENCES TO THE DEBTORS....................................................101 1. CANCELLATION OF DEBT......................................................101 2. ALTERNATIVE MINIMUM TAX...................................................102 C. ADDITIONAL TAX CONSIDERATIONS FOR ALL CLAIM HOLDERS............................102 1. DISTRIBUTIONS IN DISCHARGE OF ACCRUED INTEREST............................102 2. SUBSEQUENT SALE OF NEW PENN TRAFFIC COMMON SHARES.........................103 3. MARKET DISCOUNT...........................................................103 4. WITHHOLDING...............................................................103 VI. CONFIRMATION OF THE PLAN UNDER THE CODE............................................104 A. THE CONFIRMATION HEARING AND OBJECTIONS........................................104 B. CONFIRMATION REQUIREMENTS UNDER THE CODE.......................................105 C. SATISFACTION OF CONDITIONS PRECEDENT TO CONFIRMATION UNDER THE CODE............108 1. ACCEPTANCE BY IMPAIRED CLASSES............................................108 2. BEST INTERESTS OF CLAIM HOLDERS...........................................108 3. FEASIBILITY OF THE PLAN...................................................115 4. CONFIRMATION WITHOUT ACCEPTANCE BY ALL IMPAIRED CLASSES ("CRAMDOWN")....116 VII. ALTERNATIVES TO THE PLAN...........................................................118 VIII. RECOMMENDATION.....................................................................119 IX. CONCLUSION.........................................................................119
iii EX-2 4 ex2-3form8k_032205.txt EXHIBIT 2.3 EXHIBIT 2.3 ----------- Kelley A. Cornish (KC/0754) Elizabeth McColm (EM/8532) Ross B. Rosenfelt (RR/1911) PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK - -------------------------------------------- Chapter 11 In re Case No. 03-22945 (ASH) (Jointly Administered) THE PENN TRAFFIC COMPANY, ET AL., Debtors. - -------------------------------------------- NOTICE OF TECHNICAL MODIFICATIONS TO THE FIRST AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE DATED FEBRUARY 4, 2005 WHEREAS, on February 4, 2005 the above-captioned debtors and debtors in possession (the "Debtors") filed the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005 (the "Plan") with the Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"); WHEREAS, by order dated February 4, 2005 the Bankruptcy Court approved the Debtors' Disclosure Statement to the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession under Chapter 11 of the Bankruptcy Code dated February 4, 2005; and WHEREAS, a hearing to consider confirmation of the Plan is scheduled for March 17, 2005 at 11:00 a.m. PLEASE TAKE NOTICE that the Plan is amended to reflect the technical modifications set forth on EXHIBIT A attached hereto. Dated: New York, New York PAUL, WEISS, RIFKIND, WHARTON & March 16, 2005 GARRISON LLP By: /s/ Kelley A. Cornish ---------------------------- (A Member of the Firm) Kelley A. Cornish (KC/0754) Elizabeth McColm (EM/8532) Ross B. Rosenfelt (RR/1911) 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Attorneys for Debtors and Debtors in Possession 2 EXHIBIT A --------- TECHNICAL MODIFICATIONS TO THE FIRST AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE DATED FEBRUARY 4, 2005 1. Section 5.2. of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "The Creditors' Committee shall continue to exist after the Confirmation Date until the Effective Date with the same power and authority, and the same ability to retain and compensate professionals, as it had prior to the Confirmation Date. On and as of the Effective Date, the Creditors' Committee shall be reconstituted and shall be comprised of no more than three (3) members of the Creditors' Committee (which may include EX-OFFICIO members) prior to the Effective Date (the "Post-Effective Date Committee"). The members of the Creditors' Committee who are not members of the Post-Effective Date Committee shall be released and discharged of and from all further authority, duties, responsibilities, and obligations related to and arising from and in connection with the Cases. In the event of the death or resignation of any member of the Post-Effective Date Committee after the Effective Date, a majority of the remaining members of the Post-Effective Date Committee shall have the right to designate a successor from among the holders of Allowed Class 3 Claims. If a Post-Effective Date Committee member assigns its Claim or releases the Debtors from payment of all or the balance of its Claim, such act shall constitute a resignation from the Post-Effective Date Committee. Until a vacancy on the Post-Effective Date Committee is filled, the Post-Effective Date Committee shall function in its reduced number. The Reorganized Debtors shall consult with the Post-Effective Date Committee on a regular basis (i) concerning the Reorganized Debtors' investigation, prosecution and proposed settlement of Class 3 Claims, and (ii) the Debtors' Motion to Reject a Project Agreement dated March 1, 2001 (the "Project Agreement") with COR Route 5, LLC ("COR"), and any claims COR may assert under the Project Agreement (the "COR Matters") and shall provide written reports to the Post-Effective Date Committee on a monthly basis regarding the status of the Claims resolution process. The Post-Effective Date Committee shall have the right to be heard on all issues relating to the COR Matters. The Reorganized Debtors shall not settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without either the approval of the Post-Effective Date Committee (which shall act by majority vote) or an order of the Bankruptcy Court. Subject to the approval of the Post-Effective Date Committee, the Reorganized Debtors may settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without an order of the Bankruptcy Court. The Reorganized Debtors may settle or compromise any Class 3 Claim for less than the Allowed amount of $25,000 without an order of the Bankruptcy Court and without the approval of the Post-Effective Date Committee. The duties of the Post-Effective Date Committee shall also include services related to any applications for allowance of compensation or reimbursement of expenses of professional persons pending on the Effective Date or filed after the Effective Date (collectively, the "Filed Fee Applications") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to Final Fee Applications. The Reorganized Debtors shall pay (a) the reasonable expenses of the members of the Creditors' Committee between the Confirmation Date and the Effective Date, and the Post-Effective Date Committee (the "Post-Effective Date Committee Expenses") and (b) the reasonable fees and expenses of the professional persons employed by the Post-Effective Date Committee in connection with its duties and responsibilities as set forth in this Plan (the "Post-Effective Date Committee Professional Fees") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to the Filed Fee Applications. The Post-Effective Date Committee Expenses and the Post-Effective Date Committee Professional Fees shall be paid within ten (10) Business Days after submission of a detailed invoice therefor to the Reorganized Debtors. If the Reorganized Debtors dispute the reasonableness of any such invoice, the Reorganized Debtors, the Post-Effective Date Committee or the affected professional may submit such dispute to the Bankruptcy Court for a determination of the reasonableness of such invoice, and the disputed portion of such invoice shall not be paid until the dispute is resolved. The undisputed portion of such reasonable fees and expenses shall be paid as provided herein. The Post-Effective Date Committee shall be dissolved and the members thereof shall be released and discharged of and from further authority, duties, responsibilities and obligations relating to and arising from and in connection with the Cases on the later of (i) the Final Distribution Date, (ii) the date all services related to Filed Fee Applications are completed, and (iii) the resolution of the COR Matters by Final Order, and the retention or employment of the Post-Effective Date Committee's professionals shall terminate." 2. Section 5.15. of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "All employment and severance agreements and policies, and all employee compensation and benefit plans, policies, and programs of the Debtors applicable generally to its current and former employees, including agreements and programs subject to Section 1114 of the Bankruptcy Code that are binding upon, or being administered and provided by, the Debtors as of the Effective Date, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, life, accidental death, and dismemberment insurance plans, and workers' compensation programs, shall be deemed to be, and shall be treated as though they are, executory contracts, without prejudice to the Reorganized Debtors' rights under applicable non-bankruptcy law to modify, amend, or terminate the foregoing arrangements, except for (i) such executory contracts, programs or plans listed on Plan Schedule 3.1 to the Plan (to the extent such rejection does not violate Section 1114 of the Bankruptcy Code) and (ii) such executory contracts, programs or plans as have previously been terminated, or rejected, pursuant to a Final Order, or specifically waived by the beneficiaries of such contracts, programs or plans." 3. Section 8.5.(D) of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "Except to the extent that the releases set forth in Section 8.5.(C) hereof are not granted pursuant to the ballot election provided therein, the Confirmation Order shall contain a permanent injunction to effectuate the releases granted in this Section 8.5." 4. Section 8.5.(A) of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "Subject in all respects to Section 8.7. of this Plan, on the Effective Date, the Debtors and the Reorganized Debtors on behalf of themselves and as representatives of the Estates, release unconditionally, and are hereby deemed to release unconditionally, (i) each of the Debtors' officers and directors who served at any time during the Cases, (ii) any person that elected such directors to the extent of alleged liability for actions or inactions of such directors, (iii) the members of the Creditors' Committee, (iv) the DIP Lenders, (v) the Pre-Petition Secured Lenders, (vi) the Senior Note Trustee and (vii) the attorneys, investment bankers, restructuring consultants and financial advisors of the foregoing, including the Debtors and the Reorganized Debtors, from any and all claims, obligations, suits, judgments, damages, rights, causes of action and liabilities whatsoever (including, without limitation, those arising under the Code), whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based on any act, omission, transaction, event or other occurrence taking place on or after the Petition Date through and including the Effective Date in connection with, relating to or arising out of the Cases, the management and operation of the Debtors, the formulation, negotiation, implementation, confirmation or consummation of this Plan, the First Amended Disclosure Statement or any contract, instrument, release or other agreement or document created in connection with this Plan; PROVIDED, HOWEVER, that nothing in this Section 8.5.(A) shall (i) be construed to release or exculpate any person or entity from fraud, gross negligence, willful misconduct, malpractice, criminal conduct, unauthorized use of confidential information that causes damages or for personal gain, or ultra vires acts, (ii) limit the liability of the professionals of the Debtors, the Reorganized Debtors or the Creditors' Committee to their respective clients pursuant to DR6-102 of the Code of Professional Responsibility, or (iii) release the obligation of any directors and officers of the Debtors under any loans due and owing by such party to the Debtors." 5. Section 8.5.(B) of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "Subject in all respects to Section 8.7. of this Plan, on the Effective Date, the Debtors and the Reorganized Debtors on behalf of themselves and as representatives of the Estates, release unconditionally, and are hereby deemed to release unconditionally, (i) each of the Debtors' former and present officers and directors, (ii) any Person that elected such directors to the extent of alleged liability for actions or inactions of such directors, (iii) the Pre-Petition Secured Lenders, (iv) the Senior Note Trustee and (v) the attorneys, investment bankers, restructuring consultants and financial advisors of the foregoing, including the Debtors and the Reorganized Debtors (collectively, the "Pre-Petition Releasees") from any and all claims, obligations, suits, judgments, damages, rights, causes of action and liabilities whatsoever (including, without limitation, those arising under the Code), whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based in whole or in part on any act, omission, transaction, event or other occurrence taking place before the Petition Date in connection with or relating to Penn Traffic or any of its direct or indirect subsidiaries (the "Pre-Petition Released Matters"); PROVIDED, HOWEVER, that nothing in this Section 8.5.(B) shall (i) be construed to release or exculpate any person or entity from fraud, gross negligence, willful misconduct, malpractice, criminal conduct, unauthorized use of confidential information that causes damages or for personal gain, or ultra vires acts, (ii) limit the liability of the professionals of the Debtors or the Reorganized Debtors to their respective clients pursuant to DR6-102 of the Code of Professional Responsibility, or (iii) release the obligation of any directors and officers of the Debtors under any loans due and owing by such party to the Debtors." 6. Plan Schedule 5.6 is hereby amended by deleting such Plan Schedule in its entirety and replacing it with the following: [SEE ATTACHMENT] EXHIBIT A --------- AMENDED PLAN SCHEDULE 5.6 OFFICERS AND DIRECTORS OF THE REORGANIZED DEBTORS
- ----------------------------------------------------------------------------------------------------------------- I. PENN TRAFFIC COMPANY - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION(1) - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive John E. Burke See Attachment 5.6(a) for $25,000 per annum; biographical information Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Kevin P. Collins Current Director. See $25,000 per annum; Attachment 5.6(a) for Meeting Fees: $1,500 biographical information for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Ben Evans See Attachment 5.6(a) for $25,000 per annum; biographical information Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - -----------------------------------------------------------------------------------------------------------------
- ------------------------- (1) Members of the Board of Reorganized Penn Traffic may serve on Board Committees, to be formed on or after the Effective Date of the Plan, and will receive additional compensation as follows: -------------------------------------------------- AUDIT COMMITTEE: ---------------- o Chair Fee $5,000 per annum o Chair Fee Per Meeting $1,000 per meeting (plus expenses) o Member Fee per meeting $1,000 (plus expenses) -------------------------------------------------- COMPENSATION COMMITTEE: ----------------------- o Chair Fee $5,000 per annum o Chair Fee Per Meeting $1,000 per meeting (plus expenses) o Member Fee per meeting $1,000 (plus expenses) --------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------- I. PENN TRAFFIC COMPANY - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION(1) - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Matthew R. Glass Current Director. See $25,000 per annum; Attachment 5.6(a) for Meeting Fees: $1,500 biographical information for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Robert J. Kelly See Attachment 5.6(a) for $25,000 per annum as (Chair) biographical information Chair of the Board and $25,000 per annum as Director; Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Alan C. Levitan See Attachment 5.6(a) for $25,000 per annum; biographical information Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director, President and Chief Robert J. Chapman Current President and Officer Compensation: Executive Officer Chief Executive Officer; $450,000 per annum see Attachment 5.6(a) for base salary(2) biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President and Chief Charles G. Bostwick Current Vice-President and $208,000 per annum(2) Information Officer Chief Information Officer. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President - Distribution Timothy J. Cipiti Current Vice-President - $165,000 per annum(2) Distribution. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President of Perishable Stephen H. Erdley Current Vice-President of $145,000 per annum(2) Merchandising Perishable Merchandising. See Attachment 5.6(a) for biographical information - -----------------------------------------------------------------------------------------------------------------
- ------------------------ (2) Plus incentive compensation opportunity, to be determined. 2
- ----------------------------------------------------------------------------------------------------------------- I. PENN TRAFFIC COMPANY - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION(1) - ----------------------------------------------------------------------------------------------------------------- Vice-President of Linda L. Jones Current Vice-President of $165,500 per annum(2) Non-Perishable Merchandising Non-Perishable Merchandising. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Senior Vice-President and Leslie H. Knox Current Senior $305,000 per annum(2) Chief Marketing Officer Vice-President and Chief Marketing Officer. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President - Advertising Terry A. Kushner Current Vice-President - $120,000 per annum and Marketing Advertising and Marketing. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Senior Vice-President - Randy P. Martin Current Senior $225,000 per annum(2) Finance Vice-President - Finance. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President - Asset Steven B. Middleton Current Vice-President - $125,000 per annum(2) Protection and Governmental Asset Protection and Compliance Governmental Compliance. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President, General Francis D. Price, Jr. Current Vice-President, $169,126 per annum(2) Counsel and Secretary General Counsel and Secretary. See Attachment 5.6(a) for biographical information - -----------------------------------------------------------------------------------------------------------------
3
- ----------------------------------------------------------------------------------------------------------------- II. BIG M SUPERMARKETS, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------- III. COMMANDER FOODS, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------- IV. P&C FOOD MARKETS, INC. OF VERMONT - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
4
- ----------------------------------------------------------------------------------------------------------------- IV. P&C FOOD MARKETS, INC. OF VERMONT - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Vice-President and Secretary Francis D. Price, Jr. Current Vice-President, None Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director Rolland Tessier Current Director and None District Manager. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director John E. Meeks Current Director and None Assistant Manager See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- V. PENNWAY EXPRESS, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
5
- ----------------------------------------------------------------------------------------------------------------- VI. PENNY CURTISS BAKING COMPANY, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Vice-President Randy P. Martin Current Senior None Vice-President of The Penn Traffic Company. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Vice-President Timothy J. Cipiti Current Vice-President of None The Penn Traffic Company. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- VII. P.T. DEVELOPMENT, LLC - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
6
- ----------------------------------------------------------------------------------------------------------------- VIII. P.T. FAYETTEVILLE/UTICA, LLC - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- IX. SUNRISE PROPERTIES, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
7 PLAN SCHEDULE 5.6(A) (1) BIOGRAPHICAL INFORMATION FOR PROPOSED DIRECTORS AND OFFICERS OF THE REORGANIZED DEBTORS 1. JOHN E. BURKE. Age: 65. Mr. Burke currently serves as a consultant for Nestle USA, and has worked at Nestle since 1971. From 1991 through August, 2004, Mr. Burke was the Vice President of Credit and Collections for Nestle USA in the United States. Prior to that, in 1979, Mr. Burke was appointed Assistant Treasurer of Nestle Corporation. Mr. Burke has chaired or served on a number of Official Unsecured Creditors' Committees, including that of Fleming Companies, Inc. Mr. Burke has also served as a Director of Cumberland Farms, the National Food Manufacturers Credit Group, the Delaware Valley Credit Management Association, and the New York Credit and Financial Management. 2. KEVIN P. COLLINS. Age: 53; Director since 1999. Mr. Collins has been a member and a Principal of The Old Hill Company, LLC (financial advisory services company) since 1997. Mr. Collins was a Principal of JHP Enterprises, Ltd. (financial advisory services) from 1991 to 1997. Mr. Collins serves as a Director of Key Energy Services, Inc. (provider of oilfield services to the oil and gas industry), London Fog Industries, Inc. (apparel company), and Metretek Technologies, Inc. (provider of information services to the energy industry). 3. BEN EVANS. Age: 75. Mr. Evans currently serves as a Director of Revco D.S., Inc., Kash n' Karry Food Stores, Inc., Jamesway Corporation, Megafood Stores, Inc., Furrs/Bishop, Inc., Gibson's Discount Centers, Inc., Salant Corporation, Accord Financial Corp., Hampton Industries, Inc., Levitz Furniture, and Factory Card & Party Outlet. Mr. Evans is a CPA and is a member and chairman of various audit committees. Mr. Evans joined S.D. Leidesdorf & Company, predecessor firm to Ernst & Young in 1954, became a partner at that firm in 1968, and retired from Ernst & Whitney as a partner in 1989. From 1978 through 1989, Mr. Evans was a member of Ernst & Whitney's corporate financial service group. From 1989 until 1999, Mr. Evans was a consultant for the firm of Ernst & Young in their corporate financial services group. 4. MATTHEW GLASS. Age: 45; Director since 2002. Mr. Glass has worked in the special situations group of Soros Fund Management LLC as a Director since 2002. 5. ROBERT J. KELLY. Age: 60. Mr. Kelly has been the Chairman of the Board of the Reorganized Eagle Food Centers, Inc. since 2003. Prior to that, from 2000 to 2003, Mr. Kelly was the Chairman of the Board of Eagle Food Centers, Inc., during which time he led Eagle through a successful reorganization of their senior debt and an - ------------------------- (1) Members of the Board of Reorganized Penn Traffic may serve on Board Committees, to be formed on or after the Effective Date of the Plan. orderly liquidation of the company. Prior to that, from 1995 to 2000, Mr. Kelly was the Chairman, President and CEO of Eagle Food Centers, Inc. Prior to joining Eagle Food Centers, Mr. Kelly was employed by The Vons Companies, from 1963 to 1995 in various management positions, including Executive Vice President of Retailing. 6. ALAN C. LEVITAN. Age: 62. Mr. Levitan currently serves on the Board of the New Jersey Community Food Bank, the Academy of Food Marketing at St. Joseph's University, and the Arts Council of the Morris area in New Jersey. Mr. Levitan is a former Director of the Food Marketing Institute and former Vice Chairman of the New Jersey Food Council. Mr. Levitan was also employed by Kings Super Markets in New Jersey in various management positions, including President and CEO. Prior to that, Mr. Levitan was employed by Purity Supreme, Inc. for many years, progressing through a variety of positions, including Senior Vice President of Marketing and Merchandising and Division General Manager. 7. ROBERT J. CHAPMAN. Age: 53. President and Chief Executive Officer since April 2004. Mr. Chapman joined P&C Foods as a part time store employee in 1968 and became a store manager in 1974. Over the past 36 years, Mr. Chapman has held a number of positions of increasing authority first at P&C and later at Penn Traffic after it purchased P&C in 1988. He has distinguished himself as Director of Store Operations, Director of Franchise Operations and Vice-President of Wholesale and Franchise Operations. 8. CHARLES G. BOSTWICK. Age: 54; Vice-President and Chief Information Officer. Mr. Bostwick has held the position of Vice-President of Information Technology and Chief Information Officer, Penn Traffic, since 1998. From 1993 to 1998 Mr. Bostwick held top IT positions for various divisions of Whirlpool: Sears/Kenmore, Asian Division. Mr. Bostwick was Vice-President, MIS & Chief Information Officer, Long's Drug Store, 1989 to 1993. In 1986 to 1989 he was Director of Computing and Communication Services, Bekins. 9. TIMOTHY J. CIPITI. Age: 45; Vice-President of Distribution and Manufacturing. Mr. Cipiti has been Vice-President of Distribution and Manufacturing since 2001. He was Director of Distribution, Penn Traffic, from 1997 to 2001. He was Director of Re-Engineering and Governmental Affairs in 1997. From 1984 to 1997 Mr. Cipiti was employed by Vons Companies in various management positions. 10. STEPHEN H. ERDLEY. Age: 49; Vice-President of Perishable Merchandising. Mr. Erdley has been Vice-President of Perishable Merchandising since 2003. He held the position of Vice-President, Meat, Seafood, and Deli from1998 to 2003. Prior to moving to Corporate Headquarters in Syracuse, NY, as a result of corporate consolidation in 1997, Mr. Erdley held various Manager positions at the Bi-Lo/Riverside Division. 11. LINDA J. JONES. Age: 45; Vice-President, Non-Perishable Merchandising. Ms. Jones has been Vice-President, Non Perishable Merchandising since 2003. From 2000 to 2003 she was Vice-President, Grocery, Dairy, Frozen, DSD 9 Division. Ms. Jones was Vice-President of Sales and Advertising from 1999 to 2000. From 1997 to 1999 she held the position of Vice-President of Sales. Prior to her relocating to Corporate Headquarters in Syracuse, NY, Ms. Jones held various positions at the Bi-Lo/Riverside Division in DuBois including Vice-President of Grocery Procurement. 12. LESLIE H. KNOX. Age: 58; Senior Vice-President - Chief Marketing Officer. Mr. Knox has been Senior Vice-President and Chief Marketing Officer since May 1999. From 1995 until May 1999, Mr. Knox held the position of Vice-President - Merchandising with Weis Markets, Inc. From 1984 until 1995, Mr. Knox held various management positions with ABCO Markets, Inc., including Senior Vice-President of Sales and Marketing from 1988 to 1995. From 1969 to 1984, Mr. Knox was employed by Alpha Beta Company, a division of American Stores Company, in various management positions. 13. TERRY A. KUSHNER. Age: 52; Vice-President, Advertising and Marketing. Mr. Kushner has been Vice-President, Sales and Marketing since 2003. From 2000 to 2003 Mr. Kushner was Marketing and Community Relations Consultant, T.A. Kushner & Associates, LLC. He was Assistant Circulation Director, Consumer Sales and Marketing, The Plain Dealer from 1998 to 2000. Vice-President, Marketing and Advertising for Riser Foods Company/Giant Eagle from 1996 to 1998. Previously he held various positions from 1969 to 1996 at Finast/Tops/Royal Ahold. 14. RANDY P. MARTIN. Age: 48; Senior Vice-President - Finance. Mr. Martin has been Vice-President - Finance and Chief Accounting Officer of Penn Traffic since January 1999. From 1997 until January 1999, he served as the Company's Vice-President of Strategic Planning and Treasurer. From 1993 to 1997, Mr. Martin served as the Company's Director of Taxes. From 1984 to 1993, Mr. Martin was employed by Price Waterhouse in various positions, including Senior Tax Manager from 1991 to 1993. 15. STEVEN B. MIDDLETON. Age: 50; Vice-President of Asset Protection and Government Compliance since 2004. He was Corporation Director of Asset Protection from 1999 to 2004. From 1997 to 1999 he was Director of Warehouse Security for Penn Traffic. From 1992 to 1997 he was Director of Loss Prevention, Riverside/Bi-Lo Markets, Division of Penn Traffic. From 1988 to 1992 he was Senior Loss Prevention Specialist. From 1981 to 1988 he was P&C Loss Prevention Specialist. 16. FRANCIS D. PRICE, JR. Age: 55; Vice-President, General Counsel and Secretary. Mr. Price has been Vice-President and General Counsel since 1993 and became Secretary in 1997. Mr. Price was Vice-President and General Counsel of the Company's P&C division from 1985 until 1993. From 1978 to 1985, Mr. Price served in various other management positions at P&C. 17. ROLLAND TESSIER. Age: 42; Director of P&C Food Markets, Inc. of Vermont since 2000. Mr. Tessier has been with Penn Traffic since February 27, 2000 10 and has held the positions of Store Manager and District Manager. Mr. Tessier was with Grand Union from November 25, 1978 until February 27, 2000. 18. JOHN E. MEEKS. Age: 56; Director of P&C Food Markets, Inc. of Vermont since 2000. Mr. Meeks has been with Penn Traffic since February 27, 2000 and has held the position of Assistant Manager. Mr. Meeks was with Grand Union from July 13, 1981 until February 27, 2000. 11 EX-2 5 ex2-4form8k_032205.txt EXHIBIT 2.4 EXHIBIT 2.4 ----------- Kelley A. Cornish (KC/0754) Elizabeth McColm (EM/8532) Ross B. Rosenfelt (RR/1911) PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK - -------------------------------------------- In re Chapter 11 Case No. 03-22945 (ASH) THE PENN TRAFFIC COMPANY, ET AL., (Jointly Administered) Debtors. - -------------------------------------------- FINDINGS OF FACT AND CONCLUSIONS OF LAW RE: ORDER AND JUDGMENT CONFIRMING THE FIRST AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE DATED FEBRUARY 4, 2005 The Penn Traffic Company ("Penn Traffic"), Dairy Dell, Inc., Penny Curtiss Baking Company, Inc., Big M Supermarkets, Inc., Sunrise Properties, Inc., Pennway Express, Inc., Big Bear Distribution Company, Commander Foods, Inc., Abbott Realty Corporation, Bradford Supermarkets, Inc., P&C Food Markets, Inc. of Vermont, P.T. Development, LLC and PT Fayetteville/Utica, LLC, the above-captioned debtors and debtors in possession (each a "Debtor," and collectively, the "Debtors"), having filed voluntary petitions for relief under the provisions of chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") on May 30, 2003 (the "Petition Date"); and the Debtors having filed their First Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code with this Court on February 4, 2005 (as amended in certain technical respects, the "Plan"); and the Debtors having filed the Disclosure Statement with respect to Debtors' First Amended Joint Plan of Reorganization with this Court on February 4, 2005 (the "Disclosure Statement"); and the Court having approved the Disclosure Statement by Order dated February 4, 2005 (the "Disclosure Statement Approval Order"); and the Court having approved certain Solicitation and Voting Procedures on the Plan by Order dated February 7, 2005 (the "Voting Procedures Order"); and the Court having fixed March 9, 2005, as the last date for voting on the Plan (the "Voting Deadline") and March 14, 2005, as the last date for filing objections to the Plan (the "Objection Deadline"); and the Court having scheduled a hearing to consider confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code (the "Confirmation Hearing") for March 17, 2005; and due notice of the Voting Deadline, the Objection Deadline and the Confirmation Hearing having been given to the Debtors' creditors, equity security holders and other parties in interest in accordance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"); and the Court having found that the Disclosure Statement and the Plan were transmitted to all or substantially all of the Debtors' impaired creditors entitled to vote on the Plan; and upon the Affidavits of Mailing of Justin O'Keefe of Morrow & Co., Inc. dated February 11, 2005 (Docket Nos. 1694 and 1695) and Affidavits of Mailing of Raj Cyril of Apple Direct Mail Services Ltd. dated February 15, 2005 (Docket No. 1720) and February 18, 2005 (Docket Nos. 1721, 1722, 1723 and 1724) and the Affidavit of Mailing of Muhammed Habib of Donlin, Recano & Company, Inc. dated February 10, 2 2005 (Docket No. 1685) (together, the "Mailing Declarations"); and upon the Declaration of William B. Murphy, Associate Director of Restructuring of the Debtors, in Support of Confirmation of the Debtors' First Amended Joint Plan of Reorganization of The Penn Traffic Company and Its Affiliated Debtors and Debtors in Possession Under Chapter 11 of the Bankruptcy Code dated February 4, 2005 (the "Murphy Declaration"); and upon the Declaration of Jeffrey Hornstein in Support of Confirmation of the First Amended Joint Plan of Reorganization of The Penn Traffic Company and Its Affiliated Debtors and Debtors in Possession Under Chapter 11 of the Bankruptcy Code dated February 4, 2005 (the "Hornstein Declaration"); and upon the Declaration of Ronald Howard Certifying the Ballots Accepting or Rejecting the Debtors' First Amended Joint Plan of Reorganization Dated February 4, 2005 (the "Howard Declaration"); and upon the Verification of Holly O'Hora of Publication in USA Today of Notice of Hearing to Consider Confirmation of Debtors' First Amended Joint Plan of Reorganization (Docket No.1716) (the "O'Hora Declaration"); and upon the Certification of Arlene Moller of Publication in The New York Times of Notice of Hearing to Consider Confirmation of Debtors' First Amended Joint Plan of Reorganization of (Docket No. 1715) (the "Moller Declaration"); and upon the Declaration of Kelly Walker of Publication in The Wall Street Journal of Notice of Hearing to Consider Confirmation of Debtors' First Amended Joint Plan of Reorganization (Docket No. 1719) (the "Walker Declaration"); and upon the Declaration of Beth Damron of Publication in The Columbus Dispatch of Notice of Hearing to Consider Confirmation of Debtors' First Amended Joint Plan of Reorganization (Docket No. 1717 ) (the "Damron Declaration"); and upon the Declaration of Diane B. Scaffido of Publication in The Post-Standard of Notice of 3 Hearing to Consider Confirmation of the Debtors' First Amended Joint Plan of Reorganization (Docket No.1718 ) (the "Scaffido Declaration"); and upon the Certification of Linda Smith of Publication in The Courier-Express, Dubois, Pennsylvania of Notice of Hearing to Consider Confirmation of Debtors' First Amended Joint Plan of Reorganization (Docket No.1727) (the "Smith Declaration"); and the following objections having been filed: (i) Limited Objection by COR Route 5 Company, LLC to Debtors' First Amended Joint Plan of Reorganization (Docket No. 1800); (ii) Objection of ACE American Insurance Co. and Pacific Employers Insurance Co. to Confirmation of Amended Plan (Docket No. 1817); (iii) Objections of Certo Bros. Dist. Co., Fingar Lakes Bottling Co., Inc., Arthur R. Gren Co., Inc., Lake Beverage Corp., McCraith Bev., Inc., Onondaga Beverage Corp., Owasco Beverage, Inc., John G. Ryan, Inc., T.J. Sheehan Dist., Inc., Tri-Valley Bev., Inc., B.E. Wright Dist. Corp., C.H. Wright Dist. Corp. and Sanzone Dist. Co., Inc. to the First Amended Joint Plan of Reorganization of The Penn Traffic Company and Its Affiliated Debtors and Debtors In Possession Under Chapter 11 of the Bankruptcy Code; (iv) Limited Objection to the Debtors' Plan and Statement of Cure Amounts Owed to the GBR Landlords (Docket No. 1766); (v) Cure Statement of New Plan Excel Realty Trust and Levin Management Corporation in Response to Schedules 3.1 and 3.2 of the Debtors' First Amended Joint Plan of Reorganization (Docket No. 1772); (vi) Objection to Cure Amounts Designated by Debtor for Hornell Associates, LLC and Potsdam Associates as Lessors Under Unexpired Leases Sought to be Assumed Under Debtors' Plan (Docket No. 1773); (vii) Lakewood Village Center Company, BG Southside, LLC and Widewaters Pierce Drive Association's Limited Objection to Debtors' First Amended Plan of Reorganization and 4 Statement of Cure Amounts (Docket No. 1782); and (viii) Objection of Miracle Mile Realty, LLC to Cure Amount Designated by Debtors with Respect to Unexpired Lease of Real Property in Lebanon, New Hampshire (Docket No. 1792); and all of the foregoing objections having been resolved by agreement and withdrawn; and the Confirmation Hearing having been held on March 17, 2005; and upon the record of the proceedings throughout the Cases, the Confirmation Hearing and the arguments of counsel made at the Confirmation Hearing; and after due deliberation and sufficient cause appearing therefor, the Court hereby FINDS and DETERMINES that: 1. These findings and conclusions set forth herein constitute the Court's findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent that any finding of fact shall later be determined to be a conclusion of law it shall be so deemed, and vice versa. 2. These Findings of Fact and Conclusions of Law are being entered contemporaneously with the Order and Judgment Confirming the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession Under Chapter 11 of Bankruptcy Code Dated February 4, 2005 and Granting Related Relief (the "Confirmation Order"). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Confirmation Order or the Plan, as applicable. 3. This Court has jurisdiction over the Plan and Confirmation of the Plan pursuant to 28 U.S.C. ss.ss. 157 and 1334. Confirmation of the Plan is a core 5 proceeding pursuant to 28 U.S.C. ss. 157(b)(2)(C). Venue of the Debtors' chapter 11 cases is proper pursuant to 28 U.S.C. ss. 1408 and 1409. 4. This Court takes judicial notice of the docket of the Cases maintained by the Clerk of the Court and/or its duly appointed agent, including, without limitation, all pleadings and other documents filed, all orders entered, and all evidence and arguments made, proffered or adduced at, the hearings held before the Court during the pendency of the Cases, including, without limitation, the hearing to consider the adequacy of the Disclosure Statement. 5. In accordance with applicable sections of the Bankruptcy Code and the Bankruptcy Rules, including, but not limited to, Bankruptcy Rules 2002, 3017 and 3020, due notice of the Confirmation Hearing and the opportunity to object to confirmation of the Plan was given to the Debtors' creditors, equity security holders and other parties-in-interest. 6. In accordance with Bankruptcy Rule 3017(d) and the Disclosure Statement Approval Order, and as set forth in the Howard Declaration, copies of the Plan, the Disclosure Statement, the Disclosure Statement Approval Order, the Voting Procedures Order, a Ballot or Ballots for voting on the Plan and a Notice of Hearing to Consider Confirmation of the Plan (the "Confirmation Hearing Notice" and, together with the Plan, the Disclosure Statement, the Disclosure Statement Approval Order and the applicable Ballot(s), the "Solicitation Packages") were transmitted to holders of Claims in Classes 3 and 4 under the Plan (collectively, the "Voting Classes"). 7. In accordance with Bankruptcy Rule 3017(d) and the Disclosure Statement Approval Order, and as set forth in the Mailing Declarations, a copy of the 6 Confirmation Hearing Notice was transmitted to holders of Claims and Interests in Classes 1, 2, 3, 4, 5 and 6 under the Plan and to all other parties-in-interest. 8. In accordance with Bankruptcy Rule 3017(d) and the Disclosure Statement Approval Order, and as set forth in the respective Walker Declaration, O'Hora Declaration, Moller Declaration, Damon Declaration, Scaffido Declaration and Smith Declaration, the Debtors published a form of notice concerning the Confirmation Hearing, the Voting Deadline and the Objection Deadline in THE WALL STREET JOURNAL (National Edition), USA TODAY (National Edition), THE NEW YORK TIMES (National Edition), THE COLUMBUS DISPATCH, THE POST-STANDARD (Syracuse) and THE COURIER EXPRESS (Dubois, Pennsylvania), in each case on or before February 17, 2005. 9. Votes for acceptance or rejection of the Plan were solicited in good faith and in compliance with sections 1125 and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018, the applicable provisions of the Disclosure Statement, the Disclosure Statement Approval Order, the Voting Procedures Order, all other applicable provisions of the Bankruptcy Code and all other applicable rules, laws and regulations. 10. All procedures used to distribute to the applicable holders of Claims, and to tabulate, the Ballots, as set forth in the Howard Declaration, were fair and appropriate and conducted in accordance with the Bankruptcy Code, the Bankruptcy Rules, the local rules of this Court, the Disclosure Statement Approval Order, the Voting Procedures Order and all other applicable rules, laws and regulations. 11. The Debtors, as proponents of the Plan, have met their burden of proving the elements of sections 1129(a) and (b) of the Bankruptcy Code as more fully 7 set forth below, by a preponderance of the evidence, which is the applicable evidentiary standard in this Court for Confirmation of the Plan. 12. The Plan complies with the applicable provisions of the Bankruptcy Code, as required by section 1129(a)(1) of the Bankruptcy Code. 13. Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, Article II of the Plan designates separate classes of Claims and Interests, each of which contains only Claims and Interests that are substantially similar to the other Claims or Interests within that Class. Valid business, factual and legal reasons exist for separately classifying the various classes of Claims and Interests contained in the Plan, and such Classes do not unfairly discriminate among holders of Claims or Interests. Pursuant to sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code, Article II of the Plan identifies each Class that is impaired and each Class that is unimpaired under the Plan, and specifies the treatment provided to each Class. Pursuant to section 1123(a)(4) of the Bankruptcy Code, Article II of the Plan provides for the same treatment of each Claim or Interest in a particular class. 14. Pursuant to section 1123(a)(5) of the Bankruptcy Code, Article V and other provisions of the Plan and the Confirmation Order provide adequate means for the Plan's implementation. 15. In accordance with section 1123(a)(6) of the Bankruptcy Code, Section 5.5. of the Plan provides that on the Effective Date, each of the Reorganized Debtors will have adopted its respective Amended Certificate of Incorporation, which will comply in all respects with section 1123(a)(6) of the Bankruptcy Code including, 8 without limitation, the prohibition of the issuance of non-voting securities to the extent required by section 1123(a)(6). 16. In accordance with section 1123(a)(7) of the Bankruptcy Code, the Plan's provisions with respect to the selection of Post-Effective Date officers and directors of the Reorganized Debtors set forth on Schedule 5.6 to the Plan ("Plan Schedule 5.6"), are consistent with the interests of the holders of Claims against and Interests in the Debtors, and with public policy. 17. The Plan is dated and identifies the entities submitting it, thereby satisfying Bankruptcy Rule 3016(a). 18. In accordance with section 1123(b)(6) of the Bankruptcy Code, the Plan does not include any provision inconsistent with the applicable provisions of the Bankruptcy Code. The provisions of the Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code including, without limitation, provisions for (a) distributions to Creditors, (b) the rejection or assumption of certain executory contracts and unexpired leases, including, without limitation, those listed on Plan Schedules 3.1 and 3.2 as of the Confirmation Hearing, (c) the retention of, and right to enforce, sue on, settle or compromise (or to refuse to do any of the foregoing with respect to) certain claims or causes of action against third parties, to the extent not waived or released under the Plan, including, without limitation, those listed on Plan Schedule 8.6, (d) the creation of a Post-Effective Date Committee pursuant to Section 5.2. of the Plan, and (e) the transactions contemplated pursuant to Section 5.4. of the Plan. 9 19. Claims in Classes 1 and 2 are unimpaired under the Plan and, pursuant to section 1126(f) of the Bankruptcy Code, the votes of such holders have not been solicited as such Classes are conclusively presumed to have accepted the Plan. 20. Claims in Classes 3 and 4 are impaired under, and entitled to vote on, the Plan. 21. In accordance with section 1126(c) of the Bankruptcy Code and as set forth in the Howard Declaration, Class 3 has voted to accept the Plan, in that 98.3035% in amount and 89.8113% in number of the Claims in such Class that actually voted on the Plan have voted to accept the Plan. 22. In accordance with section 1126(c) of the Bankruptcy Code and as set forth in the Howard Declaration, Class 4 has voted to accept the Plan, in that 90.6586% in amount and 90.9938% in number of the Claims in such Class that actually voted on the Plan have voted to accept the Plan. 23. Claims in Class 5 are impaired under the Plan, are not receiving or retaining any property under the Plan and, pursuant to section 1126(g) of the Bankruptcy Code, the votes of such Class were not solicited as such Class is deemed not to have accepted the Plan. 24. Claims in Class 6 are impaired under the Plan, are not receiving or retaining any property under the Plan and, pursuant to section 1126(g) of the Bankruptcy Code, the votes of such Class were not solicited as such Class is deemed not to have accepted the Plan. 10 25. The Debtors, as proponents of the Plan, have complied with the applicable provisions of title 11 of the Bankruptcy Code, as required by section 1129(a)(2) of the Bankruptcy Code. Specifically, the Debtors are proper debtors under section 109 of the Bankruptcy Code and proper proponents of the Plan under section 1121(a) of the Bankruptcy Code. Throughout the Cases and, specifically, in transmitting the Solicitation Packages and the Confirmation Hearing Notice, and in soliciting and tabulating votes on the Plan, the Debtors have complied with the applicable provisions of the Bankruptcy Code and the Bankruptcy Rules, including as provided or permitted by Orders of this Court. 26. The Plan has been proposed in good faith and not by any means forbidden by law, in compliance with section 1129(a)(3) of the Bankruptcy Code. In determining that the Plan has been proposed in good faith, this Court has examined the totality of the circumstances surrounding the filing of the Cases. The Cases were filed, and the Plan was proposed, with the legitimate and honest purposes of reorganizing the Debtors' ongoing business, maximizing the value of the Debtors' estates to provide the maximum recovery to Claim holders under the circumstances, and preserving jobs of the Reorganized Debtors' employees in connection with the Debtors' post-reorganization operations. 27. The Debtors, the DIP Lenders, the Creditors' Committee, each of the members of such committee in its capacity as an individual creditor of the Debtors and its capacity as a member of such committee, and each of the respective present or former members, officers, directors, employees, affiliates, attorneys, investment bankers, restructuring consultants and financial advisors of the foregoing, has acted in good faith, 11 as applicable, in connection with the management and operation of the Debtors and the formulation, negotiation, proposal and implementation of the Plan and every contract, instrument, document or other agreement related thereto. 28. In compliance with section 1129(a)(4) of the Bankruptcy Code, all payments made or to be made by the Debtors or by any person issuing securities or acquiring property under the Plan for services or for costs and expenses in or in connection with the Cases, or in connection with the Plan and incident to the Cases prior to the Confirmation Date, have been approved by an order of the Court or are subject to the approval of the Court as reasonable. 29. In compliance with sections 1129(a)(5)(A)(i) and (ii) of the Bankruptcy Code, the identity, affiliations and compensation of the persons proposed to serve as directors or officers of the Reorganized Debtors on the Effective Date have been fully disclosed on Plan Schedule 5.6 and the appointment to, or continuance in, such offices by such persons is consistent with the interests of the Debtors' creditors and equity security holders and with public policy. 30. In accordance with section 1129(a)(5)(B) of the Bankruptcy Code, the Debtors have disclosed the identities of any insiders to be retained by the Reorganized Debtors and the nature of compensation for such insiders on Plan Schedule 5.6. 31. The Plan does not provide for any change in rates over which a governmental regulatory commission has jurisdiction. Accordingly, section 1129(a)(6) of the Bankruptcy Code is inapplicable to the Plan. 12 32. The Plan complies with section 1129(a)(7) of the Bankruptcy Code, in that each holder of a Claim against or Interest in the Debtors that is impaired under the Plan has accepted or is deemed to have accepted the Plan, or will receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the amount that such holder would receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code on such date. The liquidation analysis attached as Exhibit A to the Murphy Declaration, the relevant discussion in the Murphy Declaration and the evidence adduced at the Confirmation Hearing (a) are persuasive and credible as of the dates such evidence was prepared, presented or proffered, (b) either have not been controverted by other persuasive evidence or have not been challenged, (c) are based upon reasonable and sound assumptions and (d) provide a reasonable estimate of the liquidation value of the Debtors upon conversion to a chapter 7 proceeding. 33. The Plan complies with section 1129(a)(9)(A) of the Bankruptcy Code. Except to the extent that the Plan expressly provides for a different treatment or holder of an Allowed Administrative Claim has agreed to a different treatment of such Claim, the Plan provides that each holder of an Allowed Administrative Claim shall be paid in full in Cash (a) at the sole option of the Debtors (before the Effective Date) or the Reorganized Debtors (on or after the Effective Date) (i) in the ordinary course of business as the Claim becomes due and owing, or (ii) on the Initial Distribution Date, or (b) on such other date as the Bankruptcy Court may order. 34. The Plan complies with section 1129(a)(9)(B) of the Bankruptcy Code. Except to the extent that the holder of any Allowed Priority Non-Tax Claim entitled to priority pursuant to sections 507(a)(3), (a)(4) or (a)(6) of the Bankruptcy Code 13 has agreed to a different treatment of such Claim, the Plan provides that the holder of such Claim will be paid in full in Cash on the later of the Initial Distribution Date and a date as soon as practicable after the date upon which such Claim becomes an Allowed Priority Non-Tax Claim. 35. The Plan complies with section 1129(a)(9)(C) of the Bankruptcy Code. Except to the extent that the holder of an Allowed Priority Tax Claim has agreed to a different treatment of such Claim, the Plan provides that each holder of an Allowed Priority Tax Claim will receive, at the Reorganized Debtors' option, either (a) on the Initial Distribution Date, Cash equal to the amount of such Allowed Priority Tax Claim or (b) Cash in six equal annual installments, together with interest thereon at the legal rate required for such Claims in chapter 11 cases, which interest shall be paid annually in arrears pursuant to section 1129(a)(9)(C) of the Code. 36. The Plan has been accepted by impaired Classes 3 and 4, and, therefore, the Plan has been accepted by at least one class of Impaired Claims entitled to vote on the Plan, determined without including any acceptance of the Plan by any insider, in compliance with section 1129(a)(10) of the Bankruptcy Code. 37. The Plan complies with section 1129(a)(11) of the Bankruptcy Code, in that confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtors or the Reorganized Debtors. The projections attached as Exhibit B to the Murphy Declaration, together with the relevant discussion in the Murphy Declaration and the evidence adduced at the Confirmation Hearing, show that after the Effective Date, the Reorganized Debtors 14 should have adequate capital to meet their ongoing obligations and will be under the control of competent management. 38. The Plan provides for the payment of all fees payable pursuant to section 1930 of title 28 of the United States Code on or before the Effective Date, in compliance with section 1129(a)(12) of the Bankruptcy Code. The Plan further provides that all such fees payable after the Effective Date will be assumed and paid by the Reorganized Debtors. 39. The Plan satisfies the requirements of section 1129(a)(13) of the Bankruptcy Code. The Debtors are not obligated to pay any "retiree benefits" as that term is defined in section 1114(a) of the Bankruptcy Code under any of its non-union benefit plans, programs or policies, or under any of its collective bargaining agreements covering its Union Employees, except under the Fresh Side Union Contract Agreement between Penny Curtiss Baking Company Inc. and Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local 116 of Syracuse, NY affiliated with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union AFL-CIO (the "Penny Curtiss CBA"). The Penny Curtiss CBA requires the Company to make certain payments for the purpose of providing certain retiree benefits to employees covered by the Penny Curtiss CBA. The Company is assuming and maintaining the Penny Curtiss CBA pursuant to Plan Schedule 3.2. In addition, although the Debtors maintain a program of providing retired non-union employees of their P&C Market, Quality Market, Penn Traffic and Penny Curtiss Bakery divisions with life insurance policies of $5,000, this program, by its terms, is terminable by the Debtors at their discretion and, therefore, section 1114 is inapplicable to this program. 15 40. The Plan complies with section 1129(b)(1) of the Bankruptcy Code, in that the Plan does not discriminate unfairly and is fair and equitable with respect to each Class of Claims and Interests that is impaired under, and has not accepted, the Plan. In particular, the Plan is fair and equitable with respect to Class 6. Class 6 will receive no distribution under the Plan, and there are no holders of Claims or Interests junior to Class 6. Moreover, each of Classes 3 and 4, which are senior to Class 6, are receiving distributions less than the full amount of their Claims, and no Class senior to Class 6 is receiving more than full payment on account of their Claims. 41. The Plan satisfies section 1129(d) of the Bankruptcy Code, in that the principal purpose of the Plan is not the avoidance of taxes or the avoidance of application of Section 5 of the Securities Act of 1933 (15 U.S.C. ss. 77e). 42. In connection with the assumption of the executory contracts and unexpired leases pursuant to Section 3.2. of the Plan, including, without limitation, those listed on Plan Schedule 3.2 (the "Assumed Contracts and Leases") as of the Confirmation Hearing, the Plan completely satisfies all requirements for the assumption of the Assumed Contracts and Leases contained in the Bankruptcy Code, including, without limitation, the requirement to cure all outstanding defaults, if any, and to provide adequate assurance of future performance under the Assumed Contracts and Leases. 43. All releases and limitations of liability as to claims and causes of action that are embodied in the Plan, including those third-party releases in favor of non-Debtor persons and entities set forth in Section 8.5.(C) of the Plan that voluntarily were granted by creditors pursuant to the Ballots distributed in connection with soliciting votes 16 to accept or reject the Plan, are appropriate under the circumstances and in the best interests of the Debtors and their estates. 44. As contemplated by the Plan, the Ballots provided to each impaired Creditor voting on the Plan the opportunity not to release their claims and causes of action against non-Debtor persons. 45. The Plan satisfies section 1125(e) of the Bankruptcy Code, in that the Debtors and their agents, representatives, attorneys and advisors have solicited votes on the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and the Voting Procedures Order. The Debtors and their agents, representatives, attorneys and advisors therefore are entitled to the protections of section 1125(e) of the Bankruptcy Code and the limitations of liability set forth in Section 8.4. of the Plan. 46. The facts set forth in paragraphs 47-51 of the Murphy Declaration supporting the substantive consolidation of all of the Debtors for purposes of voting on, and of receiving distributions pursuant to, the Plan are persuasive and credible, have not been controverted by other persuasive evidence and have not been challenged, and provide an adequate basis for the substantive consolidation of all of the Debtors as provided in the Plan. 47. The technical modifications to the Plan set forth in decretal paragraph B of the Confirmation Order and the amendments and supplements to the Schedules and Exhibits to the Plan filed after the Voting Deadline do not materially or adversely affect or change the treatment of any Claim or Interest. Accordingly, pursuant 17 to Rule 3019 of the Bankruptcy Rules, these modifications and amendments do not require additional disclosure under section 1125 of the Bankruptcy Code or the resolicitation of acceptances or rejections under section 1126 of the Bankruptcy Code (except as have been obtained in writing), nor do they require that holders of Claims or Interests be afforded an opportunity to change previously cast acceptances or rejections of the Plan as filed with the Court. 48. The record of the Confirmation Hearing and the Cases is sufficient to support the releases, exculpations and injunctions provided for in Article VIII of the Plan. 49. The Court may properly retain jurisdiction over the matters set forth in Article IX of the Plan. 50. Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided under the Plan, the provisions of the Plan constitute a good faith compromise and settlement of all claims or controversies relating to the enforcement or termination of all contractual, legal and equitable subordination and turnover rights that a holder of a Claim or Interest or the Debtors may have with respect to any Allowed Claim or Interest, or any distribution to be made pursuant to the Plan on account of such Claim. 18 51. No further action of this Court or the respective directors or shareholders of the Debtors or the Reorganized Debtors will be required to authorize the Reorganized Debtors to enter into, execute and deliver, or adopt, as the case may be, the documents necessary to implement the provisions of the Plan. Dated: New York, New York March 17, 2005 /s/ Adlai S. Hardin, Jr. ---------------------------------- THE HONORABLE ADLAI S. HARDIN, JR. UNITED STATES BANKRUPTCY JUDGE 19 EX-2 6 ex2-5form8k_032205.txt EXHIBIT 2.5 EXHIBIT 2.5 ----------- Kelley A. Cornish (KC/0754) Elizabeth McColm (EM/8532) Ross B. Rosenfelt (RR/1911) PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, New York 10019-6064 Telephone: (212) 373-3000 Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK - ----------------------------------------------- Chapter 11 In re Case No. 03-22945 (ASH) (Jointly Administered) THE PENN TRAFFIC COMPANY, ET AL., Debtors. - ----------------------------------------------- ORDER AND JUDGMENT CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE DATED FEBRUARY 4, 2005 AND GRANTING RELATED RELIEF This matter having come on for a hearing on March 17, 2005 (the "Confirmation Hearing") on confirmation of the First Amended Joint Plan of Reorganization of The Penn Traffic Company and its Affiliated Debtors and Debtors in Possession Under Chapter 11 of Title 11 of the United States Code dated February 4, 2005, as amended pursuant to certain technical modifications filed on March 16, 2005, the "Plan"),(1) The Penn Traffic Company ("Penn Traffic"), Dairy Dell, Inc., Penny Curtiss - -------------------- (1) Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan. Baking Company, Inc., Big M Supermarkets, Inc., Sunrise Properties, Inc., Pennway Express, Inc., Big Bear Distribution Company, Commander Foods, Inc., Abbott Realty Corporation, Bradford Supermarkets, Inc., P&C Food Markets, Inc. of Vermont, P.T. Development, LLC and PT Fayetteville/Utica, LLC, the above-captioned debtors and debtors in possession (each a "Debtor," and collectively, the "Debtors") under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"); and On the basis of the record of these Cases, including the evidence presented and the arguments of counsel made at the Confirmation Hearing; and on the basis of the Findings of Fact and Conclusions of Law entered contemporaneously herewith (whose definitions and the definitions contained in the Plan are incorporated herein by reference); Now, after due deliberation, the Court hereby ORDERS, ADJUDGES AND DECREES THAT: A. The Plan, as amended by the technical modifications set forth in decretal paragraph B hereunder, complies with all applicable provisions of the Bankruptcy Code and applicable Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") relating to Confirmation. The Plan, all provisions thereof, and the exhibits and schedules thereto, hereby are confirmed. All objections to the Plan not heretofore withdrawn are overruled in their entirety. B. The following technical modifications to the Plan are hereby approved: 1. Section 5.2. of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "The Creditors' Committee shall continue to exist after the Confirmation Date until the Effective Date with the same power and authority, and the same 2 ability to retain and compensate professionals, as it had prior to the Confirmation Date. On and as of the Effective Date, the Creditors' Committee shall be reconstituted and shall be comprised of no more than three (3) members of the Creditors' Committee (which may include EX-OFFICIO members) prior to the Effective Date (the "Post-Effective Date Committee"). The members of the Creditors' Committee who are not members of the Post-Effective Date Committee shall be released and discharged of and from all further authority, duties, responsibilities, and obligations related to and arising from and in connection with the Cases. In the event of the death or resignation of any member of the Post-Effective Date Committee after the Effective Date, a majority of the remaining members of the Post-Effective Date Committee shall have the right to designate a successor from among the holders of Allowed Class 3 Claims. If a Post-Effective Date Committee member assigns its Claim or releases the Debtors from payment of all or the balance of its Claim, such act shall constitute a resignation from the Post-Effective Date Committee. Until a vacancy on the Post-Effective Date Committee is filled, the Post-Effective Date Committee shall function in its reduced number. The Reorganized Debtors shall consult with the Post-Effective Date Committee on a regular basis (i) concerning the Reorganized Debtors' investigation, prosecution and proposed settlement of Class 3 Claims, and (ii) the Debtors' Motion to Reject a Project Agreement dated March 1, 2001 (the "Project Agreement") with COR Route 5, LLC ("COR"), and any claims COR may assert under the Project Agreement (the "COR Matters") and shall provide written reports to the Post-Effective Date Committee on a monthly basis regarding the status of the Claims resolution process. The Post-Effective Date Committee shall have the right to be heard on all issues relating to the COR Matters. The Reorganized Debtors shall not settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without either the approval of the Post-Effective Date Committee (which shall act by majority vote) or an order of the Bankruptcy Court. Subject to the approval of the 3 Post-Effective Date Committee, the Reorganized Debtors may settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without an order of the Bankruptcy Court. The Reorganized Debtors may settle or compromise any Class 3 Claim for less than the Allowed amount of $25,000 without an order of the Bankruptcy Court and without the approval of the Post-Effective Date Committee. The duties of the Post-Effective Date Committee shall also include services related to any applications for allowance of compensation or reimbursement of expenses of professional persons pending on the Effective Date or filed after the Effective Date (collectively, the "Filed Fee Applications") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to Final Fee Applications. The Reorganized Debtors shall pay (a) the reasonable expenses of the members of the Creditors' Committee between the Confirmation Date and the Effective Date, and the Post-Effective Date Committee (the "Post-Effective Date Committee Expenses") and (b) the reasonable fees and expenses of the professional persons employed by the Post-Effective Date Committee in connection with its duties and responsibilities as set forth in this Plan (the "Post-Effective Date Committee Professional Fees") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to the Filed Fee Applications. The Post-Effective Date Committee Expenses and the Post-Effective Date Committee Professional Fees shall be paid within ten (10) Business Days after submission of a detailed invoice therefor to the Reorganized Debtors. If the Reorganized Debtors dispute the reasonableness of any such invoice, the Reorganized Debtors, the Post-Effective Date Committee or the affected professional may submit such dispute to the Bankruptcy Court for a determination of the reasonableness of such invoice, and the disputed portion of such invoice shall not be paid until the dispute is resolved. The undisputed portion of such reasonable fees and expenses shall be paid as provided herein. The Post-Effective Date Committee shall be dissolved and the members thereof shall be released and discharged of and from 4 further authority, duties, responsibilities and obligations relating to and arising from and in connection with the Cases on the later of (i) the Final Distribution Date, (ii) the date all services related to Filed Fee Applications are completed, and (iii) the resolution of the COR Matters by Final Order, and the retention or employment of the Post-Effective Date Committee's professionals shall terminate." 2. Section 5.15. of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "All employment and severance agreements and policies, and all employee compensation and benefit plans, policies, and programs of the Debtors applicable generally to its current and former employees, including agreements and programs subject to Section 1114 of the Bankruptcy Code that are binding upon, or being administered and provided by, the Debtors as of the Effective Date, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, life, accidental death, and dismemberment insurance plans, and workers' compensation programs, shall be deemed to be, and shall be treated as though they are, executory contracts, without prejudice to the Reorganized Debtors' rights under applicable non-bankruptcy law to modify, amend, or terminate the foregoing arrangements, except for (i) such executory contracts, programs or plans listed on Plan Schedule 3.1 to the Plan (to the extent such rejection does not violate Section 1114 of the Bankruptcy Code) and (ii) such executory contracts, programs or plans as have previously been terminated, or rejected, pursuant to a Final Order, or specifically waived by the beneficiaries of such contracts, programs or plans." 3. Section 8.5.(D) of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "Except to the extent that the releases set forth in Section 8.5.(C) hereof are not granted pursuant to the ballot election provided therein, the Confirmation Order shall contain a permanent 5 injunction to effectuate the releases granted in this Section 8.5." 4. Section 8.5.(A) of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "Subject in all respects to Section 8.7. of this Plan, on the Effective Date, the Debtors and the Reorganized Debtors on behalf of themselves and as representatives of the Estates, release unconditionally, and are hereby deemed to release unconditionally, (i) each of the Debtors' officers and directors who served at any time during the Cases, (ii) any person that elected such directors to the extent of alleged liability for actions or inactions of such directors, (iii) the members of the Creditors' Committee, (iv) the DIP Lenders, (v) the Pre-Petition Secured Lenders, (vi) the Senior Note Trustee and (vii) the attorneys, investment bankers, restructuring consultants and financial advisors of the foregoing, including the Debtors and the Reorganized Debtors, from any and all claims, obligations, suits, judgments, damages, rights, causes of action and liabilities whatsoever (including, without limitation, those arising under the Code), whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based on any act, omission, transaction, event or other occurrence taking place on or after the Petition Date through and including the Effective Date in connection with, relating to or arising out of the Cases, the management and operation of the Debtors, the formulation, negotiation, implementation, confirmation or consummation of this Plan, the First Amended Disclosure Statement or any contract, instrument, release or other agreement or document created in connection with this Plan; PROVIDED, HOWEVER, that nothing in this Section 8.5.(A) shall (i) be construed to release or exculpate any person or entity from fraud, gross negligence, willful misconduct, malpractice, criminal conduct, unauthorized use of confidential information that causes damages or for personal gain, or ultra vires acts, (ii) limit the liability of the professionals of the Debtors, the Reorganized Debtors or the Creditors' Committee to their respective clients pursuant to DR6-102 of 6 the Code of Professional Responsibility, or (iii) release the obligation of any directors and officers of the Debtors under any loans due and owing by such party to the Debtors." 5. Section 8.5.(B) of the Plan is hereby amended by deleting such section in its entirety and replacing it with the following: "Subject in all respects to Section 8.7. of this Plan, on the Effective Date, the Debtors and the Reorganized Debtors on behalf of themselves and as representatives of the Estates, release unconditionally, and are hereby deemed to release unconditionally, (i) each of the Debtors' former and present officers and directors, (ii) any Person that elected such directors to the extent of alleged liability for actions or inactions of such directors, (iii) the Pre-Petition Secured Lenders, (iv) the Senior Note Trustee and (v) the attorneys, investment bankers, restructuring consultants and financial advisors of the foregoing, including the Debtors and the Reorganized Debtors (collectively, the "Pre-Petition Releasees") from any and all claims, obligations, suits, judgments, damages, rights, causes of action and liabilities whatsoever (including, without limitation, those arising under the Code), whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based in whole or in part on any act, omission, transaction, event or other occurrence taking place before the Petition Date in connection with or relating to Penn Traffic or any of its direct or indirect subsidiaries (the "Pre-Petition Released Matters"); PROVIDED, HOWEVER, that nothing in this Section 8.5.(B) shall (i) be construed to release or exculpate any person or entity from fraud, gross negligence, willful misconduct, malpractice, criminal conduct, unauthorized use of confidential information that causes damages or for personal gain, or ultra vires acts, (ii) limit the liability of the professionals of the Debtors or the Reorganized Debtors to their respective clients pursuant to DR6-102 of the Code of Professional Responsibility, or (iii) release the obligation of any directors and officers of the Debtors under any loans due and owing by such party to the Debtors." 7 6. Plan Schedule 5.6 is hereby amended by deleting such Plan Schedule in its entirety and replacing it with EXHIBIT A. C. The Debtors, the Reorganized Debtors and their respective affiliates, subsidiaries, directors, officers, agents and attorneys are hereby authorized, empowered and directed to issue, execute, deliver, file or record any document, and to take all other actions necessary or appropriate, in their sole discretion, to implement, effectuate and consummate the Plan in accordance with its terms, all without further corporate action or action of the directors, stockholders of the Debtors or Reorganized Debtors and further order of this Court, and on and after the Effective Date, any such document will be legal, valid and binding in accordance with its terms. D. The classification of Claims and Interests for purposes of the distributions to be made under the Plan shall be governed solely by the terms of the Plan. The classifications and amounts of Claims and Interests, if any, set forth on the Ballots tendered to or returned by the Debtors' creditors and equity security holders in connection with voting on the Plan (i) were set forth on the Ballots solely for purposes of voting to accept or reject the Plan and (ii) do not necessarily represent, and in no event shall be deemed to modify or otherwise affect, the actual amount or classification of such Claims or Interests under the Plan for distribution purposes. E. Pursuant to section 1141 of the Bankruptcy Code, effective upon entry of this Order, but subject to the occurrence of the Effective Date, the Plan (including the exhibits and schedules to, and all documents and agreements created pursuant to, the Plan) and its provisions, together with the provisions of this Order, shall be binding upon the Debtors, the Reorganized Debtors, any entity acquiring or receiving 8 property or a distribution under the Plan, any lessor or lessee of property to or from the Debtors, any party to a contract with the Debtors, any person who granted or is a beneficiary of the exculpations and releases contained in or provided for under the Plan, any Creditor or equity security holder of the Debtors, including all governmental entities, whether or not the Claim or Interest of such Creditor or equity security holder is impaired under the Plan and whether or not such Creditor, equity security holder or entity has accepted the Plan, any and all nondebtor parties to executory contracts and unexpired leases with any of the Debtors, any and all entities that are parties to or are subject to the settlements, compromises, releases, discharges and injunctions described herein or in the Plan, any other party in interest, and the respective heirs, executors, administrators, successors or assigns, if any, of all of the foregoing. F. All injunctions or stays, whether imposed by operation of law or by Order of this Court, provided for in the Cases pursuant to sections 105 or 362 of the Bankruptcy Code or otherwise that are in effect on the Confirmation Date, shall remain in full force and effect until the Effective Date. As of the Effective Date, the stay imposed pursuant to section 362(a) of the Bankruptcy Code shall be dissolved and of no further force and effect, subject to the injunction set forth in paragraph K below and/or sections 524 and 1141 of the Bankruptcy Code, except that nothing herein shall bar the filing of documents in connection with the Exit Financing Facility, the Sale-Leaseback Transaction, the Post-Effective Date Trade Lien Program or the New Penn Traffic Common Shares, or the taking of such other actions as are necessary to effectuate the transactions specifically contemplated by the Plan, the Exhibits and Schedules to the Plan or this Order. 9 G. The appointment or continuation in office as officers and directors of the Reorganized Debtors of each of the individuals previously identified by the Debtors in Plan Schedule 5.6, as amended, hereby is approved and ratified as being in the best interests of the Debtors, their Creditors and equity security holders and consistent with public policy, and such officers and directors hereby are deemed elected and appointed as of the Effective Date. H. The appointment of Wayne R. Walker as Trustee for The Penn Traffic Creditor Trust hereby is approved. I. Except as provided for in this Order or in the Plan, the rights afforded under the Plan and the treatment of Claims and Interests under the Plan will be in exchange for, and in complete satisfaction, discharge and release of, all Claims and will effect the cancellation of all Interests (including rights to obtain or purchase Interests), including any interest accrued on Claims from the Petition Date. Except as provided for in the Plan or this Order, as of the Effective Date: (i) the Debtors will be discharged from all Claims or other debts that arose before the Effective Date and all debts of the kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (x) a proof of claim based on such debt is filed or deemed filed pursuant to section 501 of the Bankruptcy Code, (y) a Claim based on such debt is allowed pursuant to section 502 of the Bankruptcy Code, or (z) the holder of a Claim based on such debt has accepted the Plan; and (ii) all Interests and other rights of equity security holders in the Debtors will be terminated and of no further force and effect without any further action on the part of the Court or any other person; PROVIDED, HOWEVER, that the foregoing shall not release and discharge the Debtors from their obligations under the Plan. 10 J. As of the Effective Date, except as provided in the Plan or this Order, all persons will be precluded from asserting against the Debtors, the Reorganized Debtors or their respective affiliates, successors, assigns or property, any other or further Claims, demands, debts, rights, causes of action, liabilities or equity interests against the Debtors based upon any act, omission, transaction or other activity of any kind or nature that occurred prior to the Effective Date. In accordance with the foregoing, except as provided in the Plan or this Order, as of the Effective Date, all such Claims and other debts and liabilities against the Debtors shall be discharged and all Interests and other rights of equity security holders in the Debtors shall be satisfied, terminated or cancelled pursuant to sections 524 and 1141 of the Bankruptcy Code. Such discharge and termination will void any judgment obtained against the Debtors or the Reorganized Debtors to the extent that such judgment relates to a discharged Claim or terminated Interest. K. Except as provided in the Plan or this Order, as of the Effective Date, all entities that have held, currently hold or may hold a Claim or other demand, debt, right, cause of action or liability that is discharged or an Interest or other right of an equity security holder that is terminated pursuant to the terms of the Plan are permanently enjoined from taking any of the following actions on account of any such discharged Claims, debts or liabilities or terminated Interests or rights: (i) commencing or continuing in any manner any action or other proceeding against the Debtors, the Reorganized Debtors or their respective property; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against the Debtors, the Reorganized Debtors or their respective property; (iii) creating, perfecting or enforcing any lien or 11 encumbrance against the Debtors, the Reorganized Debtors or their respective property or any released entity; (iv) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Debtors, the Reorganized Debtors or their respective property; and (v) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan. L. The substantive consolidation of all of the Debtors for purposes of voting on, and of receiving distributions pursuant to, the Plan is approved, PROVIDED, HOWEVER, that such substantive consolidation shall not affect any obligation of any of the Reorganized Debtors to pay fees due and owing to the United States Trustee. M. Except as otherwise provided in this Order or in the Plan (and subject to the mergers and dissolutions contemplated by Section 5.4. of the Plan), each Debtor shall continue to exist as a Reorganized Debtor and as a separate corporate entity (and the substantive consolidation of all of the Debtors pursuant to the Plan shall not affect the separate corporate existence of the Reorganized Debtors), with all of the powers of a corporation under applicable law and without prejudice to any right to alter or to terminate such existence (whether by merger, dissolution or otherwise) under applicable state or foreign law. N. Except as otherwise provided in this Order, or in the Plan, all property of the Debtors' estates, to the full extent of section 541 of the Bankruptcy Code, and any and all other rights and assets of the Debtors of every kind and nature, shall, on the Effective Date of the Plan, revest in the Reorganized Debtors free and clear of all Liens, Claims and Interests and other encumbrances other than (i) those Liens, Claims and Interests and encumbrances retained, preserved or created pursuant to the Plan or any 12 document entered into in connection with the transactions described in the Plan and this Order, including, without limitation, the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program and (ii) Liens that have arisen subsequent to the Petition Date on account of taxes that arose subsequent to the Petition Date. To the extent that the succession to assets of the Debtors by the Reorganized Debtors pursuant to the Plan is deemed to constitute "transfers" of property, such transfers of property to the Reorganized Debtors (a) shall be legal, valid and effective transfers of property, (b) vest or shall vest the Reorganized Debtors with good title to such property, free and clear of all Liens, Claims and Interests and encumbrances except as set forth herein, and (c) do not and shall not subject any of the Reorganized Debtors to any liability by reason of such transfer under the Bankruptcy Code or applicable nonbankruptcy law including, but not limited to, any laws affecting successor or transferee liability, other than the Liens, Claims and Interests and encumbrances retained, preserved, or created pursuant hereto. O. Nothing in the Plan or this Order shall limit or otherwise affect any Liens, Claims, Interests or other rights that COR Route 5 Company, LLC ("COR") may have under a Project Agreement and any and all related documents, leases and instruments described in a Motion Pursuant to 11 U.S.C. ss.365(a) Authorizing the Debtor to Reject a Project Agreement with COR Route 5 Company, LLC and Granting Related Relief (the "Motion") in these Cases with respect to certain real property containing a P&C Store located at the Towne Center of Fayetteville, in Fayetteville, New York (the "Property") filed by Debtor November 9, 2004 or an Objection to Debtor's Motion Pursuant to 11 U.S.C. ss.365(a) Authorizing the Debtor to Reject the Project Agreement 13 with COR Route 5 Company, LLC and Granting Related Relief on November 18, 2004 and a Supplement to Objection to Debtor's Motion Pursuant to 11 U.S.C. ss.365(a) Authorizing Debtor to Reject the Project Agreement with COR Route 5 Company, LLC and Granting Related Relief on December 8, 2004 (the "Objection") or any related document or instrument (collectively "COR Rights") and all COR Rights, if any, are hereby preserved as if fully set forth in the Plan and such COR Rights, if any, shall be treated in accordance with the Plan, as determined by Final Order. To the extent a Trade Lien (as defined below) is granted with respect to the Property, such Trade Lien shall be automatically released, and the Collateral Trustee is hereby directed to release such Trade Lien on the Property, if and when title to the Property is transferred to COR, and provided further that the granting of such Trade Lien shall be without prejudice to any rights that COR may have, if any, that are being preserved in this Order. Additionally, the Debtors, the Reorganized Debtors, the Committee, the Post-Effective Date Committee and COR hereby preserve their rights to assert or challenge the jurisdiction of any Court concerning all matters arising from, and related to, the subject matter of any decision or order entered by the Bankruptcy Court with respect to the Motion. P. For the avoidance of doubt, the Debtors have filed for approval a Stipulation and Agreed Order Approving Assumption of Topco Bylaws and Establishing Post-Effective Date Credit Terms (the "Approval Order") pursuant to which, INTER ALIA, Penn Traffic shall assume the Bylaws of Topco Holdings, Inc. (cooperative) ("Holdings"), dated October 29, 2001 ("Bylaws"), pursuant to section 365 of the Code and Penn Traffic, Holdings and Topco Associates LLC ("Topco Associates") shall agree to new credit terms to go into effect at or around the time of the Effective Date. Nothing 14 in the Plan, this Order or any documents related thereto shall be construed as modifying, impairing or altering any rights, remedies, powers, privileges, liens, security interests or priorities accorded to Holdings and Topco Associates under the Approval Order, the Bylaws or any related member agreements. Q. National Union Fire Insurance Company of Pittsburgh, Pa., American International Underwriters Corporation, AIU Insurance Company, The Insurance Company of the State of Pennsylvania, Illinois National Insurance Company, Starr Excess Liability Insurance International, Ltd., Commerce and Industry Insurance Company, American International Specialty Lines Insurance Company, and certain other entitles related to American International Group, Inc. ("AIG Companies") have provided certain insurance coverage to the Debtors and filed certain proof(s) (the "AIG Claims"). Concerning the insurance policies provided by the AIG Companies, nothing in the Plan or in this Order shall be construed to alter the rights and duties of the AIG Companies in connection with the adjustment, defense and settlement of such claims, and in particular, to the extent such policies require the consent or approval of the AIG Companies prior to the payment of an insured claim with the proceeds of such policy, nothing in the Plan or this Order shall alter those rights. To the extent the Debtors or their successors carry out any ADR procedure they shall continue to be bound by the following provision of the ADR Order previously entered in this case which provides: ORDERED, that the ADR Procedure is without prejudice to the Insurers' and the Debtors' respective rights and obligations (including any Insurers' coverage obligations) under any applicable insurance policies, and all such rights and obligations thereunder are expressly reserved and preserved. 15 R. The AIG Claims have asserted or reserved the right to assert that AIG Companies have rights of setoff and/or recoupment against the Debtor(s), which rights allow that certain obligation due to the Debtor(s) may be setoff against certain obligations of the Debtor(s) due to the AIG Companies. The AIG Claims have preserved the AIG Companies' rights to assert all such setoff and recoupment rights to the fullest extent authorized by Section 553 of the Bankruptcy Code. Notwithstanding any provision of the Plan to the contrary, nothing in the Plan or in this Order shall be construed to prejudice, limit, reduce or eliminate such rights of setoff or recoupment. S. The AIG Companies have reserved the right to assert rights of subrogation against certain third-parties arising from insured claims paid on behalf of the Debtors. The AIG Companies have preserved the right to assert all such subrogation rights to the fullest extent authorized by the applicable insurance policies and by applicable law. Notwithstanding any provision of the Plan to the contrary, nothing in the Plan or in this Order shall be construed to prejudice, limit, reduce or eliminate such rights of subrogation. T. With respect to the insurance policies ("Policies") issued and renewed by ACE American Insurance Company and Pacific Employers Insurance Company (and possibly other ACE USA-related companies) (collectively, "ACE USA") and the various agreements between Debtors and ACE USA related to the Policies (together, with the Policies, the "ACE USA Agreements"), this Confirmation Order confirms that the ACE USA Agreements are not being rejected and will be assigned to the Reorganized Debtors pursuant to Article III of the Plan, and that from and after the 16 Effective Date of the Plan the Reorganized Debtors shall satisfy all continuing duties and obligations of the Debtors under those agreements. U. With respect to the service agreements between Debtors and ESIS, Inc. ("ESIS") for the period March 1, 2000 through the present ("ESIS Service Agreements"), this Confirmation Order confirms that the ESIS Service Agreements shall be assumed by the Debtors and assigned to the Reorganized Debtors pursuant to Article III of the Plan, and that from and after the Effective Date of the Plan the Reorganized Debtors shall satisfy all continuing duties and obligations of the Debtors under those agreements. V. Notwithstanding any other term or provision in this Confirmation Order or the Plan, this Confirmation Order (i) is without prejudice to any of the rights, claims or defenses of ACE USA and ESIS under the ACE USA Agreements and ESIS Service Agreements; (ii) confirms that all of the terms, conditions, limitations and/or exclusions contained in the ACE USA Agreements and ESIS Service Agreements shall remain unmodified and in full force and effect; (iii) confirms that Reorganized Debtors shall be deemed as the insureds under the ACE USA Agreements and shall remain bound by all of the terms, conditions, limitations and/or exclusions contained in the ACE USA Agreements; (iv) confirms that the ACE USA Agreements shall not be assigned without ACE USA's express written consent; (v) confirms that nothing in the Plan shall be deemed to create any insurance coverage that does not otherwise exist, if at all, under the terms of the ACE USA Agreements, or create any direct right of action against ACE USA that does not otherwise exist under applicable non-bankruptcy law; (vi) confirms that Confirmation is without prejudice to any of ACE USA's rights and/or defenses in any 17 subsequent litigation in which ACE USA may seek any declaration regarding the nature and/or extent of any insurance coverage under the ACE USA Agreements; and (vii) confirms that nothing in the Plan shall be construed as an acknowledgement that the ACE USA Agreements cover or otherwise apply to any Claims or that any Claims are eligible for payment under any of the ACE USA Agreements. This will further confirm that upon the Effective Date of the Plan, in exchange for the assumption of Debtors continuing obligations under the ACE USA Agreements and the ESIS Service Agreements, the proofs of claims filed by ACE USA and ESIS will be deemed withdrawn. W. On and after the Effective Date, each Reorganized Debtor is authorized to (a) operate its business, (b) use, acquire and dispose of property, and (c) compromise or settle any Claims or Interests, in each case without supervision or approval of the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, other than those restrictions expressly imposed by the Plan or by this Order. X. Effective as of the Effective Date but immediately prior to the discharge of the Debtors, without further action by the shareholders and directors of any of the Reorganized Debtors, each of Dairy Dell, Inc., Bradford Supermarkets, Inc., Abbott Realty Corporation and Big Bear Distribution Company shall be merged with and into The Penn Traffic Company, and The Penn Traffic Company shall be the surviving corporation in each such merger. The corporate transactions described in and contemplated by this paragraph X hereby are approved. Y. Notwithstanding anything to the contrary contained in the Plan or in this Order, the DIP Facility and the DIP Approval Orders shall extend and continue in 18 full force and effect until the later to occur of (i) the Effective Date and (ii) payment in full in cash of all "Obligations" under and as defined in the DIP Facility, except for any contingent reimbursement obligations under undrawn letters of credit issued or deemed issued under the DIP Facility, with respect to which letters of credit the Debtors shall, on or before the Effective Date, cause the cancellation and return thereof to the Agent, the cash collateralization thereof or the securing thereof by a back-to-back letter of credit in each case as provided in the DIP Facility, or such other reimbursement arrangements as shall be acceptable to the Agent and the DIP Lenders in their sole discretion. On the Effective Date, the Reorganized Debtors shall enter into the Exit Financing Facility with the respective Lenders thereunder. The Exit Financing Facility hereby is approved. Pursuant to section 1142(b) of the Bankruptcy Code and without further action by this Court or by the shareholders and directors of any of the Reorganized Debtors, the Reorganized Debtors are authorized to enter into the Exit Financing Facility, to perform all of their obligations thereunder and to execute and deliver all documents, agreements and instruments necessary or appropriate to enter into and perform all obligations under the Exit Financing Facility and to take all other actions and execute, deliver, record and file all other such agreements, documents, instruments, financing statements, releases, applications, registration statements, reports and any changes, additions and modifications thereto in connection with the consummation of the transactions contemplated by the Exit Financing Facility, including, without limitation, the making of such filings, or the recording of any security interests, as may be required by such Exit Financing Facility. 19 Z. The obligations under the Exit Financing Facility and all related mortgages and security agreements shall, upon execution, constitute legal, valid, binding and authorized obligations of each of the parties thereto, enforceable in accordance with their terms, and as of the Effective Date, the security interests, liens and mortgages granted under the Exit Financing Facility (the "Exit Facility Liens") and any related security agreement or mortgage shall, subject to the terms of the SREF Intercreditor Agreement (as defined in the Exit Financing Facility), constitute a legal, valid and duly perfected Lien against the Collateral (as defined in the respective documents relating to the Exit Financing Facility), senior to the Trade Liens (as defined below) as set forth in the Trade Lien Intercreditor Agreement. Neither the obligations created under the Exit Financing Facility nor the Exit Facility Liens granted thereunder shall constitute a preferential transfer or fraudulent conveyance under federal or state law and will not subject the transferee to any liability by reason of the incurrence of such obligation or grant of such Exit Facility Liens under federal or state law, including, but not limited to, successor or transferee liability. AA. The obligations under the Post-Effective Date Trade Lien Program and all related mortgages and security agreements shall, upon execution, constitute legal, valid, binding and authorized obligations of each of the parties thereto, enforceable in accordance with their terms, and as of the Effective Date, the security interests, liens and mortgages granted under the Post-Effective Date Trade Lien Program (the "Trade Liens") and any related security agreement or mortgage shall, subject to the terms of the Trade Lien Intercreditor Agreement (as defined in the Exit Financing Facility), constitute a legal, valid and duly perfected Lien against the Trade Lien Collateral (as defined in the 20 respective documents relating to the Post-Effective Date Trade Lien Program). Neither the obligations created under the Post-Effective Date Trade Lien Program Facility nor the Trade Liens granted thereunder shall constitute a preferential transfer or fraudulent conveyance under federal or state law and will not subject the transferee to any liability by reason of the incurrence of such obligation or grant of such Trade Liens under federal or state law, including, but not limited to, successor or transferee liability. BB. Subject to the terms of the SREF Intercreditor Agreement and the Trade Lien Intercreditor Agreement, the Exit Facility Liens and the Trade Liens shall attach to any "Assigned Lease Proceeds" (as defined in the Exit Financing Facility), including any proceeds from any future assignment, sale, lease or sublease or any other conveyance or transfer of any leases to which any Reorganized Debtor is a lessee, and whether assigned, sold, leased or subleased individually or as a package with other assets, whether as part of a merger or consolidation or "going concern" sale of the Debtors, Reorganized Penn Traffic or any of the Reorganized Debtors' assets, and whether transferred pursuant to section 363 or section 365 or otherwise in this or any future or subsequent bankruptcy filing by Reorganized Penn Traffic under chapter 7 or 11 of the Bankruptcy Code and regardless of whether such transaction occurs in this Bankruptcy Court or in any other bankruptcy court. CC. In the event an order dismissing any of the Cases under section 1112 or otherwise is at any time entered, the claims, mortgages, liens and security interests granted to each of the Lenders under the Exit Financing Facility and under the Post-Effect Date Trade Lien Program shall not be affected and shall continue in full force and effect in all respects and shall maintain their priorities and perfected status as 21 provided in such documents until all obligations in respect thereof shall have been paid and satisfied in full. DD. In the event any or all of the provisions of this Order are hereafter revised, modified, vacated or stayed, such reversal, stay, modification or vacation shall not effect (i) the validity of any obligation, indebtedness or liability incurred by the Debtors to the lenders under the Exit Financing Facility or pursuant to the Post-Effective Date Trade Lien Program, or (ii) the validity and enforceability of any lien or priority authorized or created thereunder. EE. Notwithstanding any such reversal, stay, modification or vacation, any indebtedness incurred under the Exit Financing Facility or pursuant to the Post-Effective Date Trade Lien Program by Reorganized Penn Traffic prior to written notice to the respective lenders or the collateral trustee of the effective date of such reversal, stay, modification or vacation shall be governed in all respects by the original provisions hereof and each of the lenders or collateral trustee thereunder shall be entitled to all of its rights, privileges and benefits granted herein and pursuant to the Exit Financing Facility or the Post-Effective Date Trade Lien Program, as the case may be. FF. Notwithstanding any retention of jurisdiction by this Court as contemplated elsewhere in this Order or in the Plan, following the Effective Date, this Court shall not retain jurisdiction over (i) the exercise of any rights or remedies by the lenders under the Exit Financing Facility or under any of the applicable instruments or agreements with respect thereto or (ii) the determination of any controversies or disputes relating thereto. 22 GG. On the Effective Date, the Reorganized Debtors shall enter into the Sale-Leaseback Transaction. Pursuant to section 1142(b) of the Bankruptcy Code and without further action by this Court or by the shareholders and directors of any of the Reorganized Debtors, the Reorganized Debtors are authorized to perform all of their obligations thereunder and to execute and deliver all documents, agreements and instruments necessary or appropriate to enter into and perform all obligations under the Sale-Leaseback Transaction and to take all other actions and execute, deliver, record and file all other such agreements, documents, instruments, financing statements, releases, applications, registration statements, reports and any changes, additions and modifications thereto in connection with the consummation of the transactions contemplated by the Sale-Leaseback Transaction, including, without limitation, the making of such filings, or the recording of any security interests, as may be required. HH. The Post-Effective Date Trade Lien Program, the appointment of Wayne R. Walker as Collateral Trustee by the Creditors' Committee, and the contractual subordination set forth in Section 5.17. of the Plan are hereby approved. On the Effective Date, pursuant to section 1142(b) of the Bankruptcy Code and without further action by this Court or by the shareholders and directors of any of the Reorganized Debtors, the Reorganized Debtors are authorized to perform all of their obligations under the Post-Effective Date Trade Lien Program and to execute and deliver all documents, agreements and instruments necessary or appropriate to enter into and perform all obligations thereunder and to take all other actions and execute, deliver, record and file all other such agreements, documents, instruments, financing statements, releases, applications, registration statements, reports and any changes, additions and modifications thereto in 23 connection with the consummation of the transactions contemplated by the Post-Effective Date Trade Lien Program, including, without limitation, the making of such filings, or the recording of any security interests, as may be required. II. On the Effective Date, the Reorganized Debtors shall issue the New Penn Traffic Common Shares. Pursuant to section 1142(b) of the Bankruptcy Code and without further action by this Court or by the shareholders and directors of any of the Reorganized Debtors, the Reorganized Debtors are authorized to perform all tasks necessary and to execute and deliver all documents, agreements and instruments necessary or appropriate to issue the New Penn Traffic Common Shares. JJ. Subject, in all respects, to Section 8.7. of the Plan, none of the Debtors, the Reorganized Debtors, the Creditors' Committee, the Post-Effective Date Committee, the Trust Advisory Board, the DIP Lenders, the Pre-Petition Secured Lenders, the Senior Note Trustee, nor any of their respective directors, employees employed by the Debtors as of the Effective Date, members, attorneys, investment bankers, restructuring consultants and financial advisors nor any other professional Persons employed by any of them (collectively, the "Exculpated Persons"), shall have or incur any liability to any Person for any act taken or omission from and after the Petition Date in connection with, relating to or arising out of the Cases, the management and operation of the Debtors, the formulation, negotiation, implementation, confirmation or consummation of the Plan, the Disclosure Statement or any contract, instrument, release or other agreement or document created in connection with the Plan. The Exculpated Persons shall have no liability to any Debtor, holder of a Claim, holder of an Interest, other party in interest in the Cases or any other Person for actions taken or not taken in 24 connection with, relating to or arising out of the Cases, the management and operation of the Debtors, the Plan or the property to be distributed under the Plan, including, without limitation, failure to obtain Confirmation of the Plan or to satisfy any condition or conditions, or refusal to waive any condition or conditions, to the occurrence of the Effective Date, and in all respects such Exculpated Persons shall be entitled to rely upon the advice of counsel with respect to their duties and responsibilities in the Cases, the management and operation of the Debtors and under the Plan. Nothing in this paragraph shall exculpate, discharge, release or relieve any Person in a manner contrary to Section 5.14. of the Plan. KK. Except as provided herein or in the Plan, all releases of claims and causes of action against persons and entities that are embodied in Section 8.5. of the Plan or in this Order, including, without limitation, those third-party releases set forth in Section 8.5.(C) of the Plan that voluntarily were granted by holders of Claims entitled to vote on the Plan (whether or not such holder submitted a timely Ballot to accept or reject the Plan), are effective and binding on all persons and entities that may have had standing to assert such claims or causes of action or that granted the releases unless the holder of a Claim entitled to vote on the Plan submitted a timely Ballot indicating an election not to grant such releases. The terms of such releases are deemed included herein as if expressly stated. Except to the extent that the releases set forth in Section 8.5.(C) of the Plan are not granted pursuant to the ballot election provided therein, the Confirmation Order shall contain a permanent injunction to effectuate the releases granted in Section 8.5. of the Plan. As of the Effective Date, all entities that have held, currently hold or may hold a claim, obligation, demand, debt, right, cause of action and liability that has 25 been released pursuant to the Plan permanently are enjoined from taking any of the following actions on account of such released claims, obligations, demands, debts, rights, causes of action or liabilities: (i) commencing or continuing in any manner any action or other proceeding; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order; (iii) creating, perfecting or enforcing any lien or encumbrance; (iv) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to any released entity; and (v) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan. LL. Notwithstanding anything contained to the contrary in the Plan or any subsequent version of the Plan, including but not limited to Article VIII and Sections 8.3., 8.4. and 8.5. of the Plan, and notwithstanding that Central States has voted to accept the Plan, the Plan shall not operate to release, bar and/or limit, in any way, any claim and/or liability that Central States might have against any party other than the Debtors and the Reorganized Debtors. MM. Except as otherwise provided in the Plan and in this Order, subject to the occurrence of the Effective Date and other than for purposes of receiving distributions under the Plan, upon entry of this Order on the docket of the Clerk of this Court, all evidences of Claims against and Interests in the Debtors that are impaired under the Plan, shall be and are deemed to be canceled and terminated, and the obligations of the applicable Debtors thereunder or in connection therewith shall be discharged. 26 NN. The provisions of the Plan constitute a good faith compromise and settlement of all claims or controversies relating to the enforcement or termination of all contractual, legal and equitable subordination and turnover rights that a holder of a Claim against or Interest in the Debtors may have with respect to any Allowed Claim or Interest, or any distribution to be made pursuant to the Plan on account of such Claim. The compromise or settlement of all such claims or controversies is approved under Rule 9019 of the Bankruptcy Rules as being fair, equitable and reasonable and in the best interests of the Debtors, the Reorganized Debtors and the holders of Claims and Interests. OO. Except as otherwise expressly provided for herein, pursuant to sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding the entry of this Order or the occurrence of the Effective Date, this Court shall retain exclusive jurisdiction over all matters arising out of, and related to, the Cases and the Plan to the fullest extent permitted by law including, INTER ALIA, all of the matters and for all of the purposes described in this Order or in Section 9.1. or otherwise in the Plan. PP. Except as otherwise provided in the Plan, this Order or any other order of the Court entered in these Cases, no payment provided for in the Plan shall be made prior to the Effective Date. QQ. Except as otherwise provided in the Plan, any distribution under the Plan that is unclaimed by the holder of the Allowed Claim entitled to such distribution for one hundred and twenty (120) days after the distribution date applicable to such distribution, shall be distributed in the manner provided for in Section 6.3.(H) of the Plan. 27 RR. The Debtors and the Reorganized Debtors shall determine which beneficial holders of Senior Notes hold Convenience Claims classified in Class 4 and entitled to distributions under Section 2.9. of the Plan. The Senior Note Trustee shall have no liability to any beneficial holder of Senior Notes against the Debtors in connection with any dispute that may arise as a result of such determination. SS. Pursuant to Section 3.1. of the Plan, as of the Effective Date, each executory contract and unexpired lease to which any of the Debtors is a party shall be deemed automatically rejected as of the Effective Date, unless such executory contract or unexpired lease (a) shall have been previously rejected or assumed by order of the Bankruptcy Court, (b) is the subject of a motion, stipulation or agreed order to assume or reject filed on or before the Confirmation Date, or (c) is listed on the schedule of assumed contracts and leases annexed as Plan Schedule 3.2, as amended as of the Confirmation Hearing. The executory contracts and unexpired leases to be rejected shall include, but shall not be limited to, the executory contracts and unexpired leases set forth on Plan Schedule 3.1, as amended as of the Confirmation Hearing, and all such rejections hereby are approved pursuant to section 365(b)(1) of the Bankruptcy Code and, to the extent applicable, section 365(b)(3) of the Bankruptcy Code, as of the Effective Date. Listing a contract or lease on Plan Schedule 3.1 shall not constitute an admission by a Debtor or Reorganized Debtor that such contract or lease is an executory contract or unexpired lease or that a Debtor or Reorganized Debtor has any liability with respect thereto. TT. Pursuant to Section 3.2. of the Plan, except with respect to executory contracts and unexpired leases that previously have been assumed or are the subject of a motion or other pleading to assume which was filed on or before the 28 Confirmation Date, all executory contracts and unexpired leases specifically listed on the schedule of assumed executory contracts and unexpired leases annexed as Plan Schedule 3.2, as amended as of the Confirmation Hearing, shall be deemed automatically assumed by the applicable Debtor as of the Effective Date. Any executory contracts and unexpired leases assumed by any of the Debtors pursuant to Section 3.2. of the Plan or pursuant to any order of this Court during the Cases shall be deemed assigned to the Reorganized Debtors on the Effective Date, and all such assumptions and assignments hereby are approved. Listing a contract or lease on Plan Schedule 3.2 shall not constitute an admission by a Debtor or Reorganized Debtor that such contract or lease is an executory contract or unexpired lease that a Debtor or Reorganized Debtor has any liability with respect thereto. Each executory contract and unexpired lease that is assumed and relates to the use, ability to acquire or occupancy of real property shall include (a) all modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affect such executory contract or unexpired lease and (b) all executory contracts or unexpired leases appurtenant to the premises, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, reciprocal easement agreements and any other interests in real estate or rights in rem related to such premises, unless any of the foregoing agreements has been rejected pursuant to a Final Order of this Court or is otherwise rejected as part of the Plan. UU. Pursuant to Section 5.15. of the Plan, except as otherwise set forth in the Plan and subject to the provisions of paragraph WW below, all employment and severance agreements and policies, and all employee compensation and benefit plans, 29 policies, and programs of the Debtors applicable generally to its current and former employees, including agreements and programs subject to Section 1114 of the Bankruptcy Code that are binding upon, or being administered and provided by, the Debtors as of the Effective Date, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, life, accidental death, and dismemberment insurance plans, and workers' compensation programs, shall be deemed to be, and shall be treated as though they are, executory contracts, without prejudice to the Reorganized Debtors' rights under applicable non-bankruptcy law to modify, amend, or terminate the foregoing arrangements, except for (i) such executory contracts, programs or plans listed on Plan Schedule 3.1 to the Plan (to the extent such rejection does not violate Section 1114 of the Bankruptcy Code) and (ii) such executory contracts, programs or plans as have previously been terminated, or rejected, pursuant to a Final Order, or specifically waived by the beneficiaries of such contracts, programs or plans. VV. Any monetary amounts by which each executory contract and unexpired lease to be assumed under the Plan may be in default shall be satisfied, under section 365(b)(1) of the Bankruptcy Code, by Cure in the amount set forth on Plan Schedule 3.2, as amended as of the Confirmation Hearing, or, in the event of an objection to such Cure amount, in the amount agreed between the parties or as ordered by the Bankruptcy Court. To the extent the non-Debtor party to the unexpired lease or executory contract has not objected to the amount of Cure set forth in Plan Schedule 3.2 on or before the Voting Deadline, such non-Debtor party shall be deemed to accept such Cure amount. To the extent that no Cure amount is listed on Plan Schedule 3.2 for an 30 executory contract or unexpired lease, and no objection has been filed by the non-Debtor party to such executory contract or unexpired lease prior to the Confirmation Date, then the Cure amount shall be deemed to be $0.00. To the extent the Debtor who is a party to the unexpired lease or executory contract is to be merged pursuant to the Plan, the non-Debtor parties to such unexpired lease or executory contract shall, upon assumption as contemplated herein, be deemed to have consented to the assignment of such unexpired lease or executory contract to the Reorganized Debtor that is the surviving entity after such merger. WW. If the rejection by a Debtor, pursuant to the Plan or otherwise, of an executory contract or unexpired lease results in a Claim, then such Claim shall be forever barred and shall not be enforceable against any Debtor or Reorganized Debtor or the properties of any of them, and such Claim shall only be entitled to treatment as a Class 3 Claim (except any COR Rights that are determined by Final Order to constitute Claims, Liens or Interests that are not non-priority unsecured claims) under the Plan in the event that a proof of claim is filed with the clerk of the Bankruptcy Court and served upon counsel to the Debtors within thirty (30) days after service of the earlier of (a) notice of the Confirmation Date, or (b) other notice that the executory contract or unexpired lease has been rejected pursuant to an order of the Bankruptcy Court. XX. Upon the occurrence of the Effective Date, other than the Debtors' Cash Balance Pension Plan, termination of which is a condition precedent to the effectiveness of the Plan, the Reorganized Debtors shall continue to sponsor, administer and maintain the Other Debtor Pension Plans, including meeting the minimum funding standards under ERISA and the Internal Revenue Code, paying all PBGC insurance 31 premiums, and administering and operating the Other Debtor Pension Plans in accordance with their terms and ERISA. Nothing in the Plan shall be deemed to discharge, release, or relieve any Person, in any capacity, from any current or future liability, if any, for breaches of fiduciary duty under ERISA with respect to the Cash Balance Pension Plan and the Other Debtor Pension Plans, and the PBGC and such Pension Plans shall not be enjoined or precluded from enforcing such liability as a result of the Plan's provisions or Confirmation. Notwithstanding the foregoing, after the Effective Date, the Reorganized Debtors shall have the right and authority to terminate, amend or freeze the Other Debtor Pension Plans in accordance with their terms, ERISA, the Internal Revenue Code, and other applicable law. YY. Pursuant to section 1142(b) of the Bankruptcy Code, without further action by this Court or the shareholders or boards of directors of any of the Reorganized Debtors, and without limiting the power or authority of the Reorganized Debtors following the Effective Date to take any and all such actions as may be permitted or required by applicable nonbankruptcy law, the Reorganized Debtors are authorized, as of the Effective Date, to: (a) maintain, amend or revise existing employment, retirement, welfare, incentive, severance, indemnification and other agreements with their active directors, officers and employees, subject to the terms and conditions of any such agreement; (b) enter into new employment, retirement, welfare, incentive, severance, indemnification and other agreements for active and retired employees; and (c) implement the provisions of the Management Stock Incentive Program, and all agreements and documents related thereto. 32 ZZ. Pursuant to section 1146(c) of the Bankruptcy Code, (a) the issuance, transfer or exchange of any securities, instruments or documents, (b) the creation or perfection of any Lien, mortgage, deed of trust or other security interest, including with respect to the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program, (c) the making or assignment of any lease or sublease or the making or delivery of any deed or other instrument of transfer under, pursuant to, in furtherance of, or in connection with the Plan, including, without limitation, any deeds, bills of sale, assignments or mortgages executed in connection with any of the transactions contemplated under the Plan or the reinvesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated in the Plan and (d) the issuance, renewal, modification or securing of indebtedness by such means, including with respect to the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program, and the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including, without limitation, the Confirmation Order, the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program and any documents relating to the Exit Financing Facility, the Sale-Leaseback Transaction and the Post-Effective Date Trade Lien Program, shall not be subject to any document recording tax, stamp tax, conveyance fee or other similar tax, mortgage tax, real estate transfer tax, mortgage 33 recording tax or other similar tax or governmental assessment. Consistent with the foregoing, each recorder of deeds or similar official for any county, city or governmental unit in which any instrument hereunder is to be recorded shall, pursuant to the Confirmation Order, be ordered and directed to accept any such instruments or documents without requiring the payment of any filing fees, documentary stamp tax, mortgage tax, mortgage recording tax, deed stamps, stamp tax, transfer tax, intangible tax or similar tax or government assessment. AAA. Pursuant to sections 1123(a) and 1142(a) of the Bankruptcy Code, the provisions of this Order, the Plan and all Plan-related documents shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law. BBB. Within ten (10) business days after the Confirmation Date, or as soon as practicable thereafter, the Debtors shall mail the notice (the "Confirmation Notice"), in substantially the form annexed hereto as EXHIBIT B, by first class mail, postage prepaid, to (i) the Office of the United States Trustee for the Southern District of New York, (ii) all known holders of Claims against, and Interests in, the Debtors, and (iii) all parties that have requested notice in these Cases. The form of Confirmation Notice hereby is approved. Service of the Confirmation Notice as provided herein shall constitute good and sufficient notice pursuant to Bankruptcy Rules 2002(f)(7), 2002(k) and 3020(c) of entry of this Order and of the relief granted herein and, except as otherwise set forth in this Order, no other or further notice need be given. CCC. Notwithstanding the foregoing, pursuant to Bankruptcy Rule 2002(l), the Debtors may, but are not required to, publish a notice of the occurrence of the Effective Date of the Plan substantially in the form attached hereto as EXHIBIT C (the 34 "Effective Date Notice") in THE WALL STREET JOURNAL (national edition), THE NEW YORK TIMES (national edition) and USA TODAY, within ten (10) business days after the occurrence of the Effective Date. DDD. Except as set forth in paragraph EEE hereof, all requests for payment of administrative costs and expenses incurred prior to the Effective Date pursuant to sections 507(a)(1) or 503(b) of the Bankruptcy Code, except for ordinary course trade debt and customer deposits and credits incurred in the ordinary course of business after the Petition Date, which amounts shall be paid by the Reorganized Debtors in the ordinary course of business, shall be filed with the Bankruptcy Court, 300 Quarropas Street, White Plains, New York 10601, and copy served on (i) The Penn Traffic Company, 1200 State Fair Boulevard, Syracuse, New York 13209, ATTENTION: Francis D. Price, Jr., Esq., Vice President and General Counsel, (ii) Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, 100109-6064, ATTENTION: Kelley A. Cornish, Esq., counsel to the Debtors, (iii) Kaye Scholer LLP, 425 Park Avenue, New York, New York 10022-3598, ATTENTION: Marc D. Rosenberg, Esq., counsel to the Debtors' postpetition secured lenders, (iv) the Office of the United States Trustee for the Southern District of New York, 33 Whitehall Street, 21st Floor, New York, New York 10004, ATTENTION: Pamela J. Lustrin, Esq., and (v) Otterbourg, Steindler, Houston & Rosen, P.C., 230 Park Avenue, New York, New York 10169, ATTENTION: Scott L. Hazan, Esq., counsel to the Official Committee of Unsecured Creditors, so as to be received no later than the date that is twenty-five (25) days after the Effective Date at 4:00 p.m. Any such request that is not filed and served within this time shall be forever barred. Notice of the deadline for filing such requests and the persons 35 upon whom service must be made, as provided for in the Confirmation Notice, constitutes good and sufficient notice and no further notice need be given. EEE. All final applications for compensation of professional persons employed by the Debtors or the Creditors' Committee pursuant to orders entered by this Court and on account of services rendered prior to the Effective Date not subject to an application already pending before the Bankruptcy Court (including the reimbursement of the expenses of the members of the Creditors' Committee) pursuant to sections 507(a)(1) or 503(b) of the Bankruptcy Code shall be filed with the Bankruptcy Court, so as to be received no later than the date that is twenty-five (25) days after the Effective Date at 4:00 p.m. Any such application that is not filed and served within this time shall be forever barred. Objections to any such application must be filed with the Bankruptcy Court and served on the parties previously identified in this paragraph EEE so as to be received no later than fifteen (15) days after the filing of such application. Notice of the deadline for filing such applications, the deadline for filing objections to such applications and the persons upon whom service must be made, as provided for in the Confirmation Notice, constitutes good and sufficient notice and no further notice need be given. FFF. No applications need be filed for compensation and reimbursement by professional persons for services rendered or expenses incurred on and after the Effective Date, and such compensation and reimbursement may be paid by the Reorganized Debtors directly in accordance with ordinary business practices and without further authorization of this Court. 36 GGG. The Creditors' Committee in its present form shall continue to exist after the Confirmation Date until the Effective Date with the same power and authority, and the same ability to retain and compensate professionals, as it had prior to the Confirmation Date. HHH. Pursuant to Section 5.2. of the Plan, on and as of the Effective Date, the Creditors' Committee shall be reconstituted and shall be comprised of no more than three (3) members of the Creditors' Committee (which may include EX-OFFICIO members) prior to the Effective Date (the "Post-Effective Date Committee"). The members of the Creditors' Committee who are not members of the Post-Effective Date Committee shall be released and discharged of and from all further authority, duties, responsibilities, and obligations related to and arising from and in connection with the Cases. In the event of the death or resignation of any member of the Post-Effective Date Committee after the Effective Date, a majority of the remaining members of the Post-Effective Date Committee shall have the right to designate a successor from among the holders of Allowed Class 3 Claims. If a Post-Effective Date Committee member assigns its Claim or releases the Debtors from payment of all or the balance of its Claim, such act shall constitute a resignation from the Post-Effective Date Committee. Until a vacancy on the Post-Effective Date Committee is filled, the Post-Effective Date Committee shall function in its reduced number. The Reorganized Debtors shall consult with the Post-Effective Date Committee on a regular basis (i) concerning the Reorganized Debtors' investigation, prosecution and proposed settlement of Class 3 Claims, and (ii) the Debtors' Motion to Reject a Project Agreement dated March 1, 2001 (the "Project Agreement") with COR Route 5, LLC ("COR"), and any claims COR may assert under 37 the Project Agreement (the "COR Matters") and shall provide written reports to the Post-Effective Date Committee on a monthly basis regarding the status of the Claims resolution process. The Post-Effective Date Committee shall have the right to be heard on all issues relating to the COR Matters. The Reorganized Debtors shall not settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without either the approval of the Post-Effective Date Committee (which shall act by majority vote) or an order of the Bankruptcy Court. Subject to the approval of the Post-Effective Date Committee, the Reorganized Debtors may settle or compromise any Class 3 Claim in excess of the Allowed amount of $25,000 without an order of the Bankruptcy Court. The Reorganized Debtors may settle or compromise any Class 3 Claim for less than the Allowed amount of $25,000 without an order of the Bankruptcy Court and without the approval of the Post-Effective Date Committee. The duties of the Post-Effective Date Committee shall also include services related to any applications for allowance of compensation or reimbursement of expenses of professional persons pending on the Effective Date or filed after the Effective Date (collectively, the "Filed Fee Applications") and the Post-Effective Date Committee shall have the right to be heard on all issues relating to Final Fee Applications. The Reorganized Debtors shall pay (a) the reasonable expenses of the members of the Creditors' Committee between the Confirmation Date and the Effective Date, and the Post-Effective Date Committee (the "Post-Effective Date Committee Expenses") and (b) the reasonable fees and expenses of the professional persons employed by the Post-Effective Date Committee in connection with its duties and responsibilities as set forth in the Plan (the "Post-Effective Date Committee Professional Fees") and the Post-Effective Date Committee shall have the 38 right to be heard on all issues relating to the Filed Fee Applications. The Post-Effective Date Committee Expenses and the Post-Effective Date Committee Professional Fees shall be paid within ten (10) Business Days after submission of a detailed invoice therefor to the Reorganized Debtors. If the Reorganized Debtors dispute the reasonableness of any such invoice, the Reorganized Debtors, the Post-Effective Date Committee or the affected professional may submit such dispute to the Bankruptcy Court for a determination of the reasonableness of such invoice, and the disputed portion of such invoice shall not be paid until the dispute is resolved. The undisputed portion of such reasonable fees and expenses shall be paid as provided herein. The Post-Effective Date Committee shall be dissolved and the members thereof shall be released and discharged of and from further authority, duties, responsibilities and obligations relating to and arising from and in connection with the Cases on the later of (i) the Final Distribution Date, (ii) the date all services related to Filed Fee Applications are completed, and (iii) the resolution of the COR Matters by Final Order, and the retention or employment of the Post-Effective Date Committee's professionals shall terminate. III. This Order shall be effective according to its terms upon its entry. JJJ. The Reorganized Debtors shall have the right, to the fullest extent permitted by section 1142 of the Bankruptcy Code, to apply to this Court for an order, notwithstanding any otherwise applicable nonbankruptcy law, directing any entity to execute and deliver any instrument or to perform any other act; PROVIDED, that without the consent of the affected party, or a determination by this Court that such relief is necessary to ensure the cooperation or compliance of any party or to compensate the Reorganized Debtors for damages associated with a lack of such cooperation or compliance with the 39 terms and conditions of this Order, the Plan, and any documents related thereto, no such order shall modify or impair any right, title, interest, privilege, or remedy expressly provided or reserved to such party under this Order, the Plan or any document related thereto. KKK. This Order shall constitute the approval of the Plan and the transactions contemplated thereby, including, without limitation, the Exit Financing Facility, the Sale-Leaseback Transaction, the Post-Effective Date Trade Lien Program, those corporate transactions contemplated under Section 5.4. of the Plan or this Order and pursuant to the Delaware General Corporation Law, the appropriate provisions of the General Corporation Law of the State of Delaware, the Business Corporation Law of the State of New York, the Business Corporation Law of the Commonwealth of Pennsylvania, the Business Corporation Act of the State of Vermont, and section 1142(b) of the Bankruptcy Code, no action of the respective directors or stockholders of the Debtors shall be required to authorize the Debtors to enter into, execute, deliver, file, adopt, amend, restate, consummate, or effectuate, as the case may be, the Plan and any contract, instrument, by-law or other document to be executed, delivered, adopted or amended in connection with the implementation of the Plan. LLL. The provisions of section 1145 of the Bankruptcy Code shall be applicable to the offer, issuance and distribution, transfer or exchange of New Penn Traffic Common Shares pursuant to the Plan, (including, without limitation, the making or delivery of any document or instrument of offer or transfer of such securities) and shall be exempt from registration under applicable securities laws (including without limitation, Section 5 of the Securities Act or any similar state or local law requiring the 40 registration for offer or sale of a security or registration or licensing of an issuer or a security) pursuant to Section 1145(a) of the Code, and may be sold without registration to the extent permitted under Section 1145 of the Code. MMM. Computershare Trust Company hereby is authorized and empowered to act as Disbursing Agent under the Plan. NNN. "Substantial consummation" of the Plan, as defined in section 1101(2) of the Bankruptcy Code, shall be deemed to occur upon completion of all actions and transactions required by the Plan to be effected prior to or upon the Effective Date. OOO. The failure specifically to include or reference any particular provision of the Plan in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Plan be confirmed in its entirety. PPP. Upon the entry of this Order, subject to the occurrence of the Effective Date, all provisions of the Plan, including all agreements, instruments and other documents filed in connection with the Plan and executed by the Debtors or the Reorganized Debtors in connection with the Plan shall be binding upon the Debtors and the Reorganized Debtors, all Claim and Interest holders and all other entities that are affected in any manner by the Plan. All agreements, instruments and other documents filed in connection with the Plan shall have full force and effect as of the entry of this Order, and shall bind all parties thereto as of the Effective Date, whether or not issued, delivered or recorded on the Effective Date or thereafter, and the provisions of the Plan and of this Order shall be construed in a manner consistent with each other so as to effect the purposes of each; PROVIDED, HOWEVER, that in the event of any inconsistency between 41 the terms of the Plan or such other documents, on the one hand, and the terms of this Order, on the other, the terms of this Order shall govern. QQQ. This Order is and shall be deemed a separate Order with respect to each of the Debtors in each Debtor's separate Case for all purposes. The Clerk of the Court is directed to file and docket this Order in the Case of each of the Debtors. RRR. The Debtors shall have the right, in accordance with section 1127 of the Bankruptcy Code, to modify or amend the Plan after the Confirmation Date to the fullest extent permitted by law, PROVIDED, that any such modification is consented to by the Creditors' Committee in writing prior to the effectiveness of any such modification or amendment. SSS. If any or all of the provisions of this Order are hereafter reversed, modified or vacated by subsequent order of this Court or any other court, such reversal, modification or vacatur shall not affect the validity of the acts or obligations incurred or undertaken under or in connection with the Plan prior to the Debtors' receipt of written notice of any such order. Notwithstanding any such reversal, modification or vacatur of this Order, any such act or obligation incurred or undertaken pursuant to, and in reliance on, this Order prior to the effective date of such reversal, modification or vacatur shall be governed in all respects by the provisions of this Order and the Plan and all documents executed pursuant thereto or any amendments or modifications thereto. Dated: New York, New York March 17, 2005 /s/ Adlai S. Hardin, Jr. ---------------------------------- THE HONORABLE ADLAI S. HARDIN, JR. UNITED STATES BANKRUPTCY JUDGE 42 EXHIBIT A --------- AMENDED PLAN SCHEDULE 5.6 OFFICERS AND DIRECTORS OF THE REORGANIZED DEBTORS
- ----------------------------------------------------------------------------------------------------------------- I. PENN TRAFFIC COMPANY - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION(1) - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive John E. Burke See Attachment 5.6(a) for $25,000 per annum; biographical information Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Kevin P. Collins Current Director. See $25,000 per annum; Attachment 5.6(a) for Meeting Fees: $1,500 biographical information for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Ben Evans See Attachment 5.6(a) for $25,000 per annum; biographical information Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - -----------------------------------------------------------------------------------------------------------------
- ------------------------- (1) Members of the Board of Reorganized Penn Traffic may serve on Board Committees, to be formed on or after the Effective Date of the Plan, and will receive additional compensation as follows: -------------------------------------------------- AUDIT COMMITTEE: ---------------- o Chair Fee $5,000 per annum o Chair Fee Per Meeting $1,000 per meeting (plus expenses) o Member Fee per meeting $1,000 (plus expenses) -------------------------------------------------- COMPENSATION COMMITTEE: ----------------------- o Chair Fee $5,000 per annum o Chair Fee Per Meeting $1,000 per meeting (plus expenses) o Member Fee per meeting $1,000 (plus expenses) --------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------- I. PENN TRAFFIC COMPANY - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION(1) - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Matthew R. Glass Current Director. See $25,000 per annum; Attachment 5.6(a) for Meeting Fees: $1,500 biographical information for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Robert J. Kelly See Attachment 5.6(a) for $25,000 per annum as (Chair) biographical information Chair of the Board and $25,000 per annum as Director; Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director - Non-Executive Alan C. Levitan See Attachment 5.6(a) for $25,000 per annum; biographical information Meeting Fees: $1,500 for each in-person attendance at Board Meetings and $750 for each attendance at telephonic Board Meetings, plus expenses. - ----------------------------------------------------------------------------------------------------------------- Director, President and Chief Robert J. Chapman Current President and Officer Compensation: Executive Officer Chief Executive Officer; $450,000 per annum see Attachment 5.6(a) for base salary(2) biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President and Chief Charles G. Bostwick Current Vice-President and $208,000 per annum(2) Information Officer Chief Information Officer. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President - Distribution Timothy J. Cipiti Current Vice-President - $165,000 per annum(2) Distribution. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President of Perishable Stephen H. Erdley Current Vice-President of $145,000 per annum(2) Merchandising Perishable Merchandising. See Attachment 5.6(a) for biographical information - -----------------------------------------------------------------------------------------------------------------
- ------------------------ (2) Plus incentive compensation opportunity, to be determined. 2
- ----------------------------------------------------------------------------------------------------------------- I. PENN TRAFFIC COMPANY - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION(1) - ----------------------------------------------------------------------------------------------------------------- Vice-President of Linda L. Jones Current Vice-President of $165,500 per annum(2) Non-Perishable Merchandising Non-Perishable Merchandising. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Senior Vice-President and Leslie H. Knox Current Senior $305,000 per annum(2) Chief Marketing Officer Vice-President and Chief Marketing Officer. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President - Advertising Terry A. Kushner Current Vice-President - $120,000 per annum and Marketing Advertising and Marketing. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Senior Vice-President - Randy P. Martin Current Senior $225,000 per annum(2) Finance Vice-President - Finance. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President - Asset Steven B. Middleton Current Vice-President - $125,000 per annum(2) Protection and Governmental Asset Protection and Compliance Governmental Compliance. See Attachment 5.6(a) for biographical information - ----------------------------------------------------------------------------------------------------------------- Vice-President, General Francis D. Price, Jr. Current Vice-President, $169,126 per annum(2) Counsel and Secretary General Counsel and Secretary. See Attachment 5.6(a) for biographical information - -----------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------- II. BIG M SUPERMARKETS, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------- III. COMMANDER FOODS, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------- IV. P&C FOOD MARKETS, INC. OF VERMONT - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------- IV. P&C FOOD MARKETS, INC. OF VERMONT - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Vice-President and Secretary Francis D. Price, Jr. Current Vice-President, None Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director Rolland Tessier Current Director and None District Manager. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director John E. Meeks Current Director and None Assistant Manager See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- V. PENNWAY EXPRESS, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------- VI. PENNY CURTISS BAKING COMPANY, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Vice-President Randy P. Martin Current Senior None Vice-President of The Penn Traffic Company. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Vice-President Timothy J. Cipiti Current Vice-President of None The Penn Traffic Company. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- VII. P.T. DEVELOPMENT, LLC - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------- VIII. P.T. FAYETTEVILLE/UTICA, LLC - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- IX. SUNRISE PROPERTIES, INC. - ----------------------------------------------------------------------------------------------------------------- TITLE NAME AFFILIATION PROPOSED COMPENSATION - ----------------------------------------------------------------------------------------------------------------- Director and President Robert J. Chapman Current President and None Chief Executive Officer of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - ----------------------------------------------------------------------------------------------------------------- Director, Vice-President and Francis D. Price, Jr. Current Vice-President, None Secretary Secretary and General Counsel of The Penn Traffic Company and Director and Officer of Various Subsidiaries. See Attachment 5.6(a) for biographical information. - -----------------------------------------------------------------------------------------------------------------
7 PLAN SCHEDULE 5.6(A) (1) BIOGRAPHICAL INFORMATION FOR PROPOSED DIRECTORS AND OFFICERS OF THE REORGANIZED DEBTORS 1. JOHN E. BURKE. Age: 65. Mr. Burke currently serves as a consultant for Nestle USA, and has worked at Nestle since 1971. From 1991 through August, 2004, Mr. Burke was the Vice President of Credit and Collections for Nestle USA in the United States. Prior to that, in 1979, Mr. Burke was appointed Assistant Treasurer of Nestle Corporation. Mr. Burke has chaired or served on a number of Official Unsecured Creditors' Committees, including that of Fleming Companies, Inc. Mr. Burke has also served as a Director of Cumberland Farms, the National Food Manufacturers Credit Group, the Delaware Valley Credit Management Association, and the New York Credit and Financial Management. 2. KEVIN P. COLLINS. Age: 53; Director since 1999. Mr. Collins has been a member and a Principal of The Old Hill Company, LLC (financial advisory services company) since 1997. Mr. Collins was a Principal of JHP Enterprises, Ltd. (financial advisory services) from 1991 to 1997. Mr. Collins serves as a Director of Key Energy Services, Inc. (provider of oilfield services to the oil and gas industry), London Fog Industries, Inc. (apparel company), and Metretek Technologies, Inc. (provider of information services to the energy industry). 3. BEN EVANS. Age: 75. Mr. Evans currently serves as a Director of Revco D.S., Inc., Kash n' Karry Food Stores, Inc., Jamesway Corporation, Megafood Stores, Inc., Furrs/Bishop, Inc., Gibson's Discount Centers, Inc., Salant Corporation, Accord Financial Corp., Hampton Industries, Inc., Levitz Furniture, and Factory Card & Party Outlet. Mr. Evans is a CPA and is a member and chairman of various audit committees. Mr. Evans joined S.D. Leidesdorf & Company, predecessor firm to Ernst & Young in 1954, became a partner at that firm in 1968, and retired from Ernst & Whitney as a partner in 1989. From 1978 through 1989, Mr. Evans was a member of Ernst & Whitney's corporate financial service group. From 1989 until 1999, Mr. Evans was a consultant for the firm of Ernst & Young in their corporate financial services group. 4. MATTHEW GLASS. Age: 45; Director since 2002. Mr. Glass has worked in the special situations group of Soros Fund Management LLC as a Director since 2002. 5. ROBERT J. KELLY. Age: 60. Mr. Kelly has been the Chairman of the Board of the Reorganized Eagle Food Centers, Inc. since 2003. Prior to that, from 2000 to 2003, Mr. Kelly was the Chairman of the Board of Eagle Food Centers, Inc., during which time he led Eagle through a successful reorganization of their senior debt and an - ------------------------- (1) Members of the Board of Reorganized Penn Traffic may serve on Board Committees, to be formed on or after the Effective Date of the Plan. orderly liquidation of the company. Prior to that, from 1995 to 2000, Mr. Kelly was the Chairman, President and CEO of Eagle Food Centers, Inc. Prior to joining Eagle Food Centers, Mr. Kelly was employed by The Vons Companies, from 1963 to 1995 in various management positions, including Executive Vice President of Retailing. 6. ALAN C. LEVITAN. Age: 62. Mr. Levitan currently serves on the Board of the New Jersey Community Food Bank, the Academy of Food Marketing at St. Joseph's University, and the Arts Council of the Morris area in New Jersey. Mr. Levitan is a former Director of the Food Marketing Institute and former Vice Chairman of the New Jersey Food Council. Mr. Levitan was also employed by Kings Super Markets in New Jersey in various management positions, including President and CEO. Prior to that, Mr. Levitan was employed by Purity Supreme, Inc. for many years, progressing through a variety of positions, including Senior Vice President of Marketing and Merchandising and Division General Manager. 7. ROBERT J. CHAPMAN. Age: 53. President and Chief Executive Officer since April 2004. Mr. Chapman joined P&C Foods as a part time store employee in 1968 and became a store manager in 1974. Over the past 36 years, Mr. Chapman has held a number of positions of increasing authority first at P&C and later at Penn Traffic after it purchased P&C in 1988. He has distinguished himself as Director of Store Operations, Director of Franchise Operations and Vice-President of Wholesale and Franchise Operations. 8. CHARLES G. BOSTWICK. Age: 54; Vice-President and Chief Information Officer. Mr. Bostwick has held the position of Vice-President of Information Technology and Chief Information Officer, Penn Traffic, since 1998. From 1993 to 1998 Mr. Bostwick held top IT positions for various divisions of Whirlpool: Sears/Kenmore, Asian Division. Mr. Bostwick was Vice-President, MIS & Chief Information Officer, Long's Drug Store, 1989 to 1993. In 1986 to 1989 he was Director of Computing and Communication Services, Bekins. 9. TIMOTHY J. CIPITI. Age: 45; Vice-President of Distribution and Manufacturing. Mr. Cipiti has been Vice-President of Distribution and Manufacturing since 2001. He was Director of Distribution, Penn Traffic, from 1997 to 2001. He was Director of Re-Engineering and Governmental Affairs in 1997. From 1984 to 1997 Mr. Cipiti was employed by Vons Companies in various management positions. 10. STEPHEN H. ERDLEY. Age: 49; Vice-President of Perishable Merchandising. Mr. Erdley has been Vice-President of Perishable Merchandising since 2003. He held the position of Vice-President, Meat, Seafood, and Deli from1998 to 2003. Prior to moving to Corporate Headquarters in Syracuse, NY, as a result of corporate consolidation in 1997, Mr. Erdley held various Manager positions at the Bi-Lo/Riverside Division. 11. LINDA J. JONES. Age: 45; Vice-President, Non-Perishable Merchandising. Ms. Jones has been Vice-President, Non Perishable Merchandising since 2003. From 2000 to 2003 she was Vice-President, Grocery, Dairy, Frozen, DSD 9 Division. Ms. Jones was Vice-President of Sales and Advertising from 1999 to 2000. From 1997 to 1999 she held the position of Vice-President of Sales. Prior to her relocating to Corporate Headquarters in Syracuse, NY, Ms. Jones held various positions at the Bi-Lo/Riverside Division in DuBois including Vice-President of Grocery Procurement. 12. LESLIE H. KNOX. Age: 58; Senior Vice-President - Chief Marketing Officer. Mr. Knox has been Senior Vice-President and Chief Marketing Officer since May 1999. From 1995 until May 1999, Mr. Knox held the position of Vice-President - Merchandising with Weis Markets, Inc. From 1984 until 1995, Mr. Knox held various management positions with ABCO Markets, Inc., including Senior Vice-President of Sales and Marketing from 1988 to 1995. From 1969 to 1984, Mr. Knox was employed by Alpha Beta Company, a division of American Stores Company, in various management positions. 13. TERRY A. KUSHNER. Age: 52; Vice-President, Advertising and Marketing. Mr. Kushner has been Vice-President, Sales and Marketing since 2003. From 2000 to 2003 Mr. Kushner was Marketing and Community Relations Consultant, T.A. Kushner & Associates, LLC. He was Assistant Circulation Director, Consumer Sales and Marketing, The Plain Dealer from 1998 to 2000. Vice-President, Marketing and Advertising for Riser Foods Company/Giant Eagle from 1996 to 1998. Previously he held various positions from 1969 to 1996 at Finast/Tops/Royal Ahold. 14. RANDY P. MARTIN. Age: 48; Senior Vice-President - Finance. Mr. Martin has been Vice-President - Finance and Chief Accounting Officer of Penn Traffic since January 1999. From 1997 until January 1999, he served as the Company's Vice-President of Strategic Planning and Treasurer. From 1993 to 1997, Mr. Martin served as the Company's Director of Taxes. From 1984 to 1993, Mr. Martin was employed by Price Waterhouse in various positions, including Senior Tax Manager from 1991 to 1993. 15. STEVEN B. MIDDLETON. Age: 50; Vice-President of Asset Protection and Government Compliance since 2004. He was Corporation Director of Asset Protection from 1999 to 2004. From 1997 to 1999 he was Director of Warehouse Security for Penn Traffic. From 1992 to 1997 he was Director of Loss Prevention, Riverside/Bi-Lo Markets, Division of Penn Traffic. From 1988 to 1992 he was Senior Loss Prevention Specialist. From 1981 to 1988 he was P&C Loss Prevention Specialist. 16. FRANCIS D. PRICE, JR. Age: 55; Vice-President, General Counsel and Secretary. Mr. Price has been Vice-President and General Counsel since 1993 and became Secretary in 1997. Mr. Price was Vice-President and General Counsel of the Company's P&C division from 1985 until 1993. From 1978 to 1985, Mr. Price served in various other management positions at P&C. 17. ROLLAND TESSIER. Age: 42; Director of P&C Food Markets, Inc. of Vermont since 2000. Mr. Tessier has been with Penn Traffic since February 27, 2000 10 and has held the positions of Store Manager and District Manager. Mr. Tessier was with Grand Union from November 25, 1978 until February 27, 2000. 18. JOHN E. MEEKS. Age: 56; Director of P&C Food Markets, Inc. of Vermont since 2000. Mr. Meeks has been with Penn Traffic since February 27, 2000 and has held the position of Assistant Manager. Mr. Meeks was with Grand Union from July 13, 1981 until February 27, 2000. 11 -----END PRIVACY-ENHANCED MESSAGE-----