Exhibit 4.1
FOURTH AMENDMENT
FOURTH AMENDMENT, dated as of March 16, 2000 (this
"AMENDMENT"), to the Credit Agreement, dated as of November 19, 1997 (as
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT"), among
FRIENDLY ICE CREAM CORPORATION, a Massachusetts corporation (the "BORROWER"),
the several banks and other financial institutions or entities parties thereto
(the "LENDERS"), and SOCIETE GENERALE, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested, and upon this Amendment
becoming effective, the Lenders will have agreed, that certain provisions of the
Credit Agreement be amended in the manner provided for in this Amendment;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.
2.1 AMENDMENTS TO SECTION 1.1 OF THE CREDIT AGREEMENT.
(a) The definition of "Applicable Margin" in Section 1.1 of
the Credit Agreement is hereby amended by deleting said definition in its
entirety and substituting in lieu thereof the following:
"APPLICABLE MARGIN": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Eurodollar ABR
Loans Loans
----- -----
Revolving Credit Loans 3.00% 1.50%
Tranche A Term Loans 3.00% 1.50%
Tranche B Term Loans 3.00% 1.50%
Tranche C Term Loans 3.25% 1.75%;
PROVIDED, that on and after the first Adjustment Date occurring after
the completion of four full fiscal quarters of the Borrower after the
Closing Date, the Applicable Margin with respect to Revolving Credit
Loans and Tranche A Term Loans will be determined pursuant to the
Pricing Grid."
(b) The definition of "Business-Sustaining Capital
Expenditures" in Section 1.1 of the Credit Agreement is hereby amended by
deleting from the third line thereof the amount "$15,000,000" and substituting
in lieu thereof the amount "$11,000,000".
(c) The definition of "Consolidated EBITDA" in Section 1.1 of
the Credit Agreement is hereby amended by adding the following proviso after the
amount "$7,500,000" at the end of such definition:
"and PROVIDED, FURTHER, that, in calculating Consolidated EBITDA for
periods that include any fiscal quarter of the Borrower's 1999 fiscal
year, an aggregate amount of up to $3,200,000 of gains resulting from
sales of restaurants consummated on or prior to January 2, 2000 shall
not be subtracted from Consolidated Net Income"
2.2 AMENDMENT TO SECTION 7.1(d) OF THE CREDIT AGREEMENT.
Paragraph (d) of Section 7.1 of the Credit Agreement is hereby amended by
deleting said paragraph in its entirety and substituting in lieu thereof the
following:
"(d) MAINTENANCE OF NET WORTH. Permit Consolidated Net Worth
as of the last day of any fiscal quarter of the Borrower ending during
any fiscal year set forth below to be less than the amount set forth
below opposite such fiscal year:
Fiscal Quarter Consolidated Net Worth
-------------- ----------------------
Fiscal quarters from and including fourth quarter of
fiscal 1997 through and including third quarter of ($95,000,000)
fiscal 1998
Fourth quarter of fiscal 1998 ($98,000,000)
First quarter of fiscal 1999 ($105,000,000)
Second quarter of fiscal 1999 ($100,000,000)
Third quarter of fiscal 1999 ($93,500,000)
Fourth quarter of fiscal 1999 ($93,000,000)
First quarter of fiscal 2000 ($112,500,000)
Second quarter of fiscal 2000 ($109,500,000)
Third quarter of fiscal 2000 ($104,500,000)
Fourth quarter of fiscal 2000 ($103,000,000)
First quarter of fiscal 2001 ($105,000,000)
Fiscal Quarter Consolidated Net Worth
-------------- ----------------------
Second quarter of fiscal 2001 ($100,000,000)
Third quarter of fiscal 2001 ($95,000,000)
Fourth quarter of fiscal 2001 ($92,000,000)
Fiscal quarters from and including first quarter of
fiscal 2002 through and including third quarter of ($97,000,000)
fiscal 2002
Fourth quarter of fiscal 2002 ($72,000,000)
Fiscal quarters from and including first quarter of
fiscal 2003 through and including third quarter of ($77,000,000)
fiscal 2003
Fourth fiscal quarter of fiscal 2003 and all fiscal
quarters thereafter ($67,000,000)"
2.3 AMENDMENT TO ANNEX A. Annex A to the Credit Agreement is
hereby amended to read in its entirety as set forth in Annex A hereto.
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall
become effective as of the date set forth above (the "AMENDMENT EFFECTIVE DATE")
on the date on which (a) the Borrower and the Required Lenders shall have
executed and delivered to the Administrative Agent this Amendment and (b) each
Guarantor shall have executed the Acknowledgment and Consent in the form annexed
hereto.
SECTION 4. REPRESENTATIONS AND WARRANTIES. In order to induce
the Administrative Agent and the Lenders to enter into this Amendment, the
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders that the representations and warranties made by the Loan Parties in the
Loan Documents are true and correct in all material respects on and as of the
Amendment Effective Date, before and after giving effect to the effectiveness of
this Amendment, as if made on and as of the Amendment Effective Date, except to
the extent such representations and warranties expressly relate to a specific
earlier date, in which case such representations and warranties were true and
correct as of such earlier date.
SECTION 5. PAYMENT OF EXPENSES. The Borrower agrees to pay or
reimburse the Administrative Agent for all of its reasonable out-of-pocket costs
and expenses incurred in connection with this Amendment and any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
SECTION 6. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
On and after the Amendment Effective Date, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Administrative Agent under any of
the Loan Documents. Except as expressly amended herein, all of the provisions of
the Credit Agreement and the other Loan Documents are and shall remain in full
force and effect in accordance with the terms thereof and are hereby in all
respects ratified and confirmed.
SECTION 7. COUNTERPARTS. This Amendment may be executed by one
or more of the parties to this Amendment on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Amendment by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Amendment signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
SECTION 8. GOVERNING LAW. This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
FRIENDLY ICE CREAM CORPORATION
By:______________________________
Title:
SOCIETE GENERALE
By:______________________________
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By:______________________________
Title:
BLACK DIAMOND INTERNATIONAL
FUNDING, LTD.
By:______________________________
Title:
BLACK DIAMOND CLO, 1998-I LTD.
By:______________________________
Title:
FLEET NATIONAL BANK
By:______________________________
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By:_______________________________
Title:
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.,
its Agent/Manager
By:__________________________
Title:
BANK OF AMERICA, N.A.
By:_______________________________
Title:
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P.
as Collateral Manager
By:__________________________
Title:
PAM CAPITAL FUNDING, L.P.
By: Highland Capital Management, L.P.
as Collateral Manager
By:__________________________
Title:
SENIOR DEBT PORTFOLIO
By: First Source Financial, Inc.,
its Agent/Manager
By:__________________________
Title:
FIRST UNION NATIONAL BANK
By:_______________________________
Title:
FOOTHILL INCOME TRUST, L.P.
By:_______________________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By:_______________________________
Title:
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned corporations as guarantors under the
Guarantee and Collateral Agreement, dated as of November 19, 1997, made by the
undersigned corporations in favor of the Administrative Agent, for the benefit
of the Lenders, hereby (a) consents to the transactions contemplated by this
Amendment and (b) acknowledges and agrees that the guarantees (and grants of
collateral security therefor) contained in such Guarantee and Collateral
Agreement are, and shall remain, in full force and effect after giving effect to
this Amendment and all prior modifications to the Credit Agreement.
FRIENDLY'S RESTAURANTS FRANCHISE,
INC.
By:________________________________
Title:
FRIENDLY'S INTERNATIONAL, INC.
By:________________________________
Title:
ANNEX A
PRICING GRID FOR REVOLVING CREDIT LOANS,
TRANCHE A TERM LOANS AND COMMITMENT FEES
- ------------------------------------------------- --------------------------- ------------------------------
Consolidated Applicable Margin Commitment Fee Rate
Leverage Ratio for Eurodollar Loans
- ------------------------------------------------- --------------------------- ------------------------------
Greater than
or Equal to 4.0 to 1.0 3.000% 0.500%
- ------------------------------------------------- --------------------------- ------------------------------
Greater than Less
or Equal to 3.5 to 1.0 and than 4.0 to 1.0 2.750% 0.500%
- ------------------------------------------------- --------------------------- ------------------------------
Greater than Less
or Equal to 3.0 to 1.0 and than 3.5 to 1.0 2.625% 0.500%
- ------------------------------------------------- --------------------------- ------------------------------
Greater than Less
or Equal to 2.5 to 1.0 and than 3.0 to 1.0 2.375% 0.375%
- ------------------------------------------------- --------------------------- ------------------------------
Less than 2.5 to 1.0 2.125% 0.375%
- ------------------------------------------------- --------------------------- ------------------------------
Changes in the Applicable Margin with respect to Revolving Loans and
Tranche A Loans or in the Commitment Fee Rate resulting from changes in the
Consolidated Leverage Ratio shall become effective on the date (the "ADJUSTMENT
DATE") on which financial statements are delivered to the Lenders pursuant to
Section 6.1 (but in any event not later than the 45th day after the end of each
of the first three quarterly periods of each fiscal year or the 90th day after
the end of each fiscal year, as the case may be) and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Leverage Ratio as at the end of the fiscal period that would have
been covered thereby shall for the purposes of this definition be deemed to be
greater than 4.0 to 1.0. In addition, at all times while a Default or an Event
of Default shall have occurred and be continuing, there shall be no reduction in
the Applicable Margin with respect to Revolving Loans and Tranche A Loans or in
the Commitment Fee Rate; PROVIDED, HOWEVER, that any applicable reduction shall
become effective at such time as no Default or Event of Default shall be
continuing. Each determination of the Consolidated Leverage Ratio pursuant to
this definition shall be made as at the end of and with respect to the period of
four consecutive fiscal quarters of the Borrower ending at the end of the period
covered by the relevant financial statements and shall reflect the matters set
forth in the proviso to Section 7.1(a).