Exhibit 4.1
SEVENTH AMENDMENT
SEVENTH AMENDMENT, dated as of March 19, 2001 (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 several banks
and other financial institutions or entities parties thereto as Lenders, and
SOCIETE GENERALE, as administrative agent.
W I T N E S S E T H :
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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 THE CREDIT AGREEMENT. Effective as of the date
hereof, but subject to the satisfaction of the conditions precedent set forth in
Section 4 hereof, the Credit Agreement is hereby amended as follows:
2.1 The following definitions are inserted in Section 1.1 in correct
alphabetical order:
"'FINANCIAL ADVISOR': any advisor retained by the Agent to (i)
initially review and assess the agreed upon financial information
provided by the Borrower including the budget and liquidity forecast
and (ii) upon the failure of the Refinancing Conditions to be met or
the occurrence of a Default, review and assess the Loan Parties'
financial condition and projections, evaluate the Loan Parties'
operations and provide such service as the Agent may reasonably
request.;
"'LONG ISLAND FRANCHISE SALE': the transaction contemplated in the
Purchase and Sale Agreement
dated as of January 15, 2001 between the Borrower and J & B Restaurant
Partners of Long Island, LLC., whether the transaction occurs in one
or more closings;
"'REFINANCING CONDITIONS': as defined in Section 2.10(e).";
2.2 The definition of Applicable Margin is amended and restated as follows:
"'APPLICABLE MARGIN': for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Eurodollar Loans ABR Loans
---------------- ---------
Revolving Credit Loans 3.25% 1.75%
Tranche A Term Loans 3.25% 1.75%
Tranche B Term Loans 3.25% 1.75%
Tranche C Term Loans 3.50% 2.00%
PROVIDED, that the Applicable Margin for each Type of Loan shall be increased by
0.25% on August 2, 2001, by an additional 0.50% on January 2, 2002 and by an
additional 0.25% on each of April 1, 2002, July 1, 2002 and October 1, 2002.";
2.3 The definition of Asset Sale is amended by replacing "clause (a), (b),
(c), (d) or (g) of Section 7.5" with "clause (a), (b), (c), (d), (g) or (h) of
Section 7.5";
2.4 The definition of Business-Sustaining Capital Expenditures is amended
and restated as follows:
"'BUSINESS-SUSTAINING CAPITAL EXPENDITURES': for any period of four
consecutive fiscal quarters ending in fiscal year 2001 or 2002,
Capital Expenditures during such period in an amount equal to
$9,850,000 or $10,067,000, respectively, constituting the amount of
Capital Expenditures necessary to maintain the then existing Property
of the Borrower and its Subsidiaries in good working order and
condition (excluding payments in respect of the principal amount of
Indebtedness incurred in connection with such expenditures).";
2.5 The definition of Commitment Fee Rate is amended by deleting the
proviso.
2.6 The definition of Consolidated EBITDA is amended and restated as
follows:
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"'CONSOLIDATED EBITDA': for any period, Consolidated Net Income for
such period PLUS, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited
to, goodwill) and organization costs, (e) any extraordinary, unusual
or non-recurring expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) and (f) any other non-cash
charges, and MINUS, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of
business (it being understood that sales of restaurants in an
aggregate amount up to $2,500,000 in any fiscal year are deemed to be
in the ordinary course of business and that all other gains from the
sales of restaurants occurring after the Long Island Franchise Sale
Date (defined below) are deemed to be extraordinary, unusual or
non-recurring)) and (c) any other non-cash income, all as determined
on a consolidated basis, PROVIDED, that, in calculating Consolidated
EBITDA for periods that include any fiscal quarter of the Borrower's
1998 and 1999 fiscal years, any expenses resulting from the closing of
the Borrower's Troy, Ohio manufacturing and distribution facility and
the termination of its operations in China and the United Kingdom
shall be disregarded to the extent that the aggregate amount of such
expenses does not exceed $7,500,000 and PROVIDED, FURTHER, that, in
calculating Consolidated EBITDA (i) 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 and (ii) for periods that include any
fiscal quarter of the Borrower's 2001 fiscal year, any gains
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resulting from sales of restaurants in the ordinary course of business
consummated on or prior to the closing of the Long Island Franchise
Sale (the "Long Island Franchise Sale Date") shall not be subtracted
from Consolidated Net Income and shall not reduce the aggregate gains
from sales of restaurants which are deemed to be in the ordinary
course of business for the purposes of this definition.";
2.7 The definition of Interest Payment Date is amended and restated as
follows:
"'INTEREST PAYMENT DATE': (a) as to any ABR Loan, the fifteenth day of
each month in which such Loan is outstanding and the final maturity
date of such Loan, (b) as to any Eurodollar Loan, the last day of each
Interest Period and (c) as to any Loan (other than any Revolving
Credit Loan that is an ABR Loan), the date of any repayment or
prepayment made in respect thereof, but only to the extent of the
portion prepaid or repaid.";
2.8 The definition of Interest Period is amended by replacing "one, two,
three or six months thereafter, as selected" in clauses (a) and (b) with "one
month thereafter as set forth";
2.9 The definition of L/C Fee Payment Date is amended by replacing
"January, April, July and October" with "month";
2.10 The definition of Net Cash Proceeds is amended by (i) inserting after
"(a) in connection with" "the Long Island Franchise Sale," and (ii) inserting
before "such Asset Sale" in each place it appears "the Long Island Franchise
Sale or";
2.11 The definitions of Adjustment Date and Pricing Grid are deleted;
2.12 The definition of Tranche B Maturity Date is amended and restated as
follows:
"'Tranche B Maturity Date': November 15, 2002.";
2.13 The definition of Tranche C Maturity Date is amended and restated as
follows:
"'Tranche C Maturity Date': November 15, 2002.";
2.14 Section 2.3(b) is amended by (i) replacing "23" with "15", (ii)
deleting the installments from January 15, 2003 through and including July 15,
2004 from the table and (iii) replacing the amount opposite "Tranche B Maturity
Date" in the table with "the remaining balance of the Tranche B Term Loans";
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2.15 Section 2.3(c) is amended by (i) replacing "27" with "15", (ii)
deleting the installments from January 15, 2003 through and including July 15,
2005 from the table and (iii) replacing the amount opposite "Tranche C Maturity
Date" in the table with "the remaining balance of the Tranche C Term Loans";
2.16 Section 2.7(a) is amended by replacing "quarterly" with "monthly" and
"January, April, July and October" with "month";
2.17 Section 2.10(b) is amended and restated as follows:
"(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date, the Borrower or any of its Subsidiaries shall receive
proceeds in the form of cash or Cash Equivalents from any Asset Sale
or Recovery Event then, unless a Reinvestment Notice shall be
delivered in respect thereof, (i) such proceeds (exclusive of any
amounts applied on such date in the manner permitted by clause (i) of
the definition of Net Cash Proceeds) shall be delivered to the Agent
and held by the Agent for the benefit of the Lenders for up to five
Business Days, (ii) within five Business Days following receipt of
such proceeds, the Borrower shall deliver a notice of prepayment and
certificate (the "Prepayment Documents"), signed by an Authorized
Signatory, setting forth its calculation of Net Cash Proceeds from
such Asset Sale or Recovery Event and (iii) on the fifth Business Day
following receipt of such proceeds, or on such earlier Business Day as
the Borrower may request following delivery of the Prepayment
Documents, the Net Cash Proceeds, together with any interest earned on
such proceeds, shall be applied toward the prepayment of the Term
Loans and the reduction of the Revolving Credit Commitments as set
forth in Section 2.10(d) and the remaining balance, if any, of such
proceeds shall be available to the Borrower; PROVIDED that, if the
Borrower fails to timely deliver the Prepayment Documents, then, on
the fifth Business Day following receipt of such proceeds, all such
proceeds, together with any interest earned on such proceeds, shall be
applied in the manner described in clause (iii) and PROVIDED FURTHER
that, on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term
Loans and the
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reduction of the Revolving Credit Commitments as set forth in Section
2.10(d)."
2.18 Section 2.10(e) is added as follows:
"(e) If (x) the Borrower fails (i) to continue to use reasonable
efforts to pursue a refinancing of the Credit Agreement Obligations,
(ii) to obtain, by no later than April 30, 2001, a commitment for such
refinancing, which commitment shall be from a lender and in a form
reasonably satisfactory to the Agent, or (iii) to satisfy, by no later
than August 2, 2001, the Credit Agreement Obligations, or (y) at any
time Bank of America Securities LLC determines not to pursue such
refinancing (the "Refinancing Conditions"), then (I) on August 2, 2001
the Revolving Credit Commitments shall be reduced by $5,000,000,
PROVIDED, HOWEVER, that no such Commitment reduction shall be required
unless the closing of the Long Island Franchise Sale shall have
occurred and the Net Cash Proceeds thereof shall have been no less
than $10,000,000, and (II) in addition to reducing the Revolving
Credit Commitments if required by clause (I) of this Section 2.10(e),
paying the scheduled installments of principal due hereunder and
making the prepayments required from the proceeds of the Long Island
Franchise Sale pursuant to Section 7.5(h), the Borrower shall prepay
Term Loans such that the cumulative additional prepayments of Term
Loans applied in the manner and order set forth in Section 2.10(d)
from January 1, 2001 through each of the test dates set forth below is
no less than the amount set forth below opposite such date:
Minimum Cumulative
Prepayment and
Commitment Reduction
Test Date to Lenders
--------- --------------------
October 15, 2001 $ 6,000,000
January 15, 2002 $ 7,500,000
April 15, 2002 $ 8,500,000
July 15, 2002 $10,000,000.
"Concurrently with any reduction of Revolving Credit Commitments
pursuant to this Section 2.10(e), the Borrower shall prepay Revolving
Credit Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as reduced in accordance with this Section 2.10(e).
Notwithstanding anything herein to the contrary, in no event shall any
failure by the Borrower to meet a Refinancing Condition be a
Default.";
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2.19 Section 2.16(b) is amended by (i) deleting "(except as otherwise
provided in Section 2.16(d))" and (ii) inserting before the period at the end of
the second sentence "(except as otherwise provided in Section 7.5(h))";
2.20 Section 2.16(d) is amended and restated as follows:
"(d) Intentionally omitted.";
2.21 Section 3.3(a) is amended by replacing "quarterly" each time it
appears with "monthly";
2.22 Section 6.1(b) is amended by deleting "and" at the end thereof and
Section 6.1(c) is added as follows:
"(c) as soon as available, but in any event not later than 20 days
after the end of each fiscal month of the Borrower (30 days in the
case of the last fiscal month of any fiscal year), the unaudited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures for the previous
year and the most recent Projections delivered pursuant to Section
6.2(c) and including a statement of income reported on by business
segment (in a format reasonably acceptable to the Agent), certified by
an Authorized Signatory as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and";
2.23 Section 6.2 is amended by adding before the period at the end of
Section 6.2(i):
"together with a forecast of cash receipts and disbursements (in a
format reasonably acceptable to the Agent) for the thirteen week
period commencing with the first week of the month in which such
forecast is required to be delivered and, commencing with the second
such forecast delivered, a report setting forth in comparative form
the actual cash receipts and disbursements for the fiscal four or five
week period ending with the last week in the month just ended and the
forecast most recently delivered for such period.";
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2.24 Section 6.13 is added as follows:
"6.13 FINANCIAL ADVISOR. The Borrower shall cooperate with the
Financial Advisor.";
2.25 The table in Section 7.1(a) is amended by (i) replacing "4.10"
appearing opposite the fourth quarter of fiscal 2000 with "5.30", (ii) replacing
"Fiscal quarters from and including first quarter of fiscal 2001 through and
including third quarter of fiscal 2001" and the ratio opposite such quarters
with:
"First quarter of fiscal 2001 5.10 to 1.00
"Second quarter of fiscal 2001 5.30 to 1.00
"Third quarter of fiscal 2001 5.00 to 1.00",
(iii) replacing "3.55" appearing opposite the fourth quarter of fiscal 2001 with
"5.20" and (iv) adding the following proviso to the end thereof:
"PROVIDED, HOWEVER, if the Long Island Franchise Sale does not occur in the
first quarter of fiscal 2001, then, in lieu of the ratio set forth above as
at the last day of the four consecutive fiscal quarters of the Borrower
ending with the first quarter of fiscal 2001, the Consolidated Leverage
Ratio as at such day shall not exceed 5.90 to 1.00.";
2.26 The table in Section 7.1(b) is amended by (i) replacing "1.75"
appearing opposite the fourth quarter of fiscal 2000 with "1.45", (ii) replacing
"Fiscal quarters from and including first quarter of fiscal 2001 through and
including third quarter of fiscal 2001" and the ratio opposite such quarters
with:
"First quarter of fiscal 2001 1.45 to 1.00
"Second quarter of fiscal 2001 1.40 to 1.00
"Third quarter of fiscal 2001 1.45 to 1.00",
(iii) replacing "1.95" appearing opposite the fourth quarter of fiscal 2001 with
"1.45" and (iv) adding the following proviso to the end thereof:
"PROVIDED, HOWEVER, if the Long Island Franchise Sale does not occur in the
first quarter of fiscal 2001, then, in lieu of the ratio set forth above
for the period of four consecutive fiscal quarters of the Borrower ending
with the first quarter of fiscal 2001, the Consolidated Interest Coverage
Ratio for such period shall not be less than 1.30 to 1.00.";
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2.27 The table in Section 7.1(c) is amended by (i) replacing "1.20"
appearing opposite the fourth quarter of fiscal 2000 with "1.05", (ii) replacing
"1.10" appearing opposite "Fiscal quarters from and including first quarter of
fiscal 2001 through and including third quarter of fiscal 2001" with "1.00",
(iii) replacing "1.25" appearing opposite the fourth quarter of fiscal 2001 with
"1.10" and (iv) adding the following proviso to the end thereof:
"PROVIDED, HOWEVER, if the Long Island Franchise Sale does not occur in the
first quarter of fiscal 2001, then, in lieu of the ratio set forth above
for the period of four consecutive fiscal quarters of the Borrower ending
with the first quarter of fiscal 2001, the Consolidated Fixed Charge
Coverage Ratio for such period shall not be less than 0.95 to 1.00.";
2.28 The table in Section 7.1(d) is amended by (i) replacing
"($105,000,000)" appearing opposite the first quarter of fiscal 2001 with
"($106,000,000)", (ii) replacing "($100,000,000)" appearing opposite the second
quarter of fiscal 2001 with "($103,500,000)", (iii) replacing "($95,000,000)"
appearing opposite the third quarter of fiscal 2001 with "($100,000,000)", (iv)
replacing "($92,000,000)" appearing opposite the fourth quarter of fiscal 2001
with "($103,000,000)" and (v) adding the following proviso to the end thereof:
"PROVIDED, HOWEVER, if the Long Island Franchise Sale does not occur in the
first quarter of fiscal 2001, then, in lieu of the ratio set forth above as
at the last day of the first quarter of fiscal 2001, the Consolidated Net
Worth of the Borrower as at such day shall not be less than
($108,500,000).";
2.29 Section 7.1(e) is added as follows:
"(e) MINIMUM CUMULATIVE CONSOLIDATED EBITDA. Permit the cumulative
Consolidated EBITDA for the period beginning January 1, 2001 and
ending on the last day of any fiscal month set forth below to be less
than the amount set forth opposite such fiscal month:
Month Minimum Cumulative
----- Consolidated EBITDA
-------------------
January 2001 ($ 108,000)
February 2001 $ 1,466,000
March 2001 $ 9,897,000
April 2001 $12,282,000
May 2001 $16,074,000
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Month Minimum Cumulative
----- Consolidated EBITDA
-------------------
June 2001 $24,499,000
July 2001 $30,746,000
August 2001 $37,737,000
September 2001 $43,119,000
October 2001 $46,182,000
November 2001 $49,129,000
December 2001 $53,174,000
January 2002 $53,066,000
February 2002 $54,532,000
March 2002 $59,380,000
"PROVIDED, HOWEVER, if the Long Island Franchise Sale does not occur in the
first quarter of fiscal 2001, then, in lieu of the amount set forth above
for the period ending on the last day of March of fiscal 2001, the
cumulative Consolidated EBITDA for such period shall not be less than
$4,848,000.";
2.30 Section 7.5 is amended by (i) deleting "and" at the end of clause (f),
(ii) replacing the period at the end of clause (g) with "; and" and (iii) adding
clause (h) as follows:
"(h) the Long Island Franchise Sale, provided, however, that (x) the
initial closing of the Long Island Franchise Sale occurs no later than
April 30, 2001, (y) the consideration received by the Borrower for the
stores included in the Long Island Franchise Sale shall not be less
than 85% of the aggregate market value of such stores based upon the
appraisal report prepared by Cushman & Wakefield, Inc. as of February
1, 2001, and (z) simultaneously with the closing thereof, (i) the Net
Cash Proceeds of the Long Island Franchise Sale shall be delivered to
the Agent and applied as follows: FIRST, the sum of $2,710,714.29
shall be applied to the payment or prepayment of the installments of
the Term Loans due April 15, 2001 if such installments of the Term
Loans have not previously been paid; SECOND, the sum of $2,000,000.00
shall be applied to the prepayment of the Term Loans in accordance
with Section 2.16(b); THIRD, the sum of $10,300,000 shall be applied
to prepay Revolving Credit Loans; FOURTH, if none of the Net Cash
Proceeds of the Long Island Franchise Sale shall have been applied to
the payment or prepayment of the installments of the Term Loans due
April 15, 2001, then the additional sum of $2,700,000 shall be applied
to prepay Revolving Credit Loans; and FIFTH, the remaining amount
shall be applied to the prepayment of the Term Loans in accordance
with
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Section 2.16(b); and (ii) the Borrower shall take all action necessary
or reasonably requested by the Agent to grant to the Agent, for the
benefit of the Lenders, a first priority security interest in any
non-cash proceeds of the Long Island Franchise Sale, including the
endorsement and delivery to the Agent, in accordance with the
Guarantee and Collateral Agreement, of any such non-cash proceeds
evidenced by notes.";
2.31 Section 10.2 is amended by replacing the notice information for the
Agent with the following:
"Societe Generale
1221 Avenue of the Americas
New York, New York 10020
Attention: Edward J. Grimm
Telephone: (212) 278-6450
Telecopy: (212) 278-6178
"with a copy to
"Societe Generale
560 Lexington Avenue
New York, New York 10022
Attention: Anna LoPiccolo
Telephone: (212) 278-6732
Telecopy: (212) 278-5525";
2.32 Section 10.5 is amended by inserting before the comma at the end of
clause (a) thereof:
"and the Financial Advisor, PROVIDED, HOWEVER, that if the Refinancing
Conditions are duly performed and satisfied and no Default shall have
occurred hereunder, the Borrower shall not be obligated to pay or
reimburse the Agent for fees and expenses of the Financial Advisor in
an amount greater than $125,000 plus reasonable and documented
expenses";
2.33 Section 10.6(c) is amended by inserting after "such consent" in the
fourth line thereof "of the Borrower"; and
2.34 Annex A to the Credit Agreement is deleted.
SECTION 3. AMENDMENT FEE. The Borrower shall pay to each Lender that
executes and delivers this Amendment by 4:00 p.m. (New York City time) on
Monday, March 19, 2001, an amendment fee of 0.75% of the sum of its outstanding
Revolving Credit Commitment and Term Loans payable in two installments as
follows: 0.25% on the Amendment Effective Date (the "First Amendment Fee
Installment") and the balance of 0.50% on
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September 30, 2001 (the "Second Amendment Fee Installment"), provided that, if
the Credit Agreement Obligations are satisfied and paid in full in cash prior to
September 30, 2001, then the Second Amendment Fee Installment will be due and
payable in the reduced amount of 0.125% on the date of such payment. The fees
payable hereunder shall be fully earned on the Amendment Effective Date.
SECTION 4. 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 Agent this Amendment, (b) each Guarantor shall have executed
the Acknowledgment and Consent in the form annexed hereto, (c) the Borrower
shall have paid all fees required to be paid, and expenses for which invoices
have been presented (including fees, disbursements and other charges of counsel
to the Agent) in connection with the Credit Agreement and this Amendment, (d)
the Borrower shall have delivered to the Agent, to be applied toward the
prepayment of the Term Loans and reduction of the Revolving Credit Commitments
as set forth in Section 2.10(d), all Net Cash Proceeds held on the date this
Amendment becomes effective, together with a notice of prepayment and
certificate, signed by an Authorized Signatory, setting forth the Borrower's
calculation of such Net Cash Proceeds, (e) each Loan Party shall have delivered
to the Agent a Perfection Certificate in the form annexed hereto as Exhibit A,
(f) the Borrower shall have delivered to the Agent a certified copy of the
executed contract of sale for the Long Island Franchise Sale, (g) the Borrower
shall have delivered to the Agent, with sufficient copies for each Lender, an
appraisal report addressed to the Agent, for the benefit of the Lenders, opining
on the market value of the fee simple and leasehold interests of the Borrower in
its tangible assets (including real property and furniture, fixtures, equipment
and machinery) as of February 1, 2001, prepared by Cushman & Wakefield, Inc. in
a manner consistent with the appraisal prepared by Cushman & Wakefield, Inc. as
of August 1, 1997 and including an opinion of such market value as of February
1, 2001, in excess of $300,000,000, excluding any assets which have been sold
prior to the date of such report and excluding all assets which are included in
the Long Island Franchise Sale and (h) the Borrower shall have paid to the
Agent, on behalf of each Lender that shall have executed and delivered its
signature page hereto to counsel to the Agent by 4:00 p.m. (New York City time)
on Monday, March 19, 2001 the First Amendment Fee Installment.
SECTION 5. CUSHMAN & WAKEFIELD MEETING. The Borrower shall arrange for a
meeting among Cushman & Wakefield, the Agent and the Lenders which shall occur
no later than March 30, 2001 to discuss the appraisal prepared by Cushman &
Wakefield.
SECTION 6. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and
the Lenders to enter into this Amendment,
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the Borrower hereby represents and warrants to the Agent and the Lenders as
follows as of the Amendment Effective Date:
6.1 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 in all material respects as of such earlier date.
6.2 No Default or Event of Default has occurred and is continuing.
6.3 Each of the Borrower and the other Loan Parties has the corporate
power, and has been duly authorized by all requisite corporate action, to
execute and deliver this Amendment and the other documents and agreements
executed and delivered in connection herewith to which it is a party. This
Amendment has been duly executed by the Borrower and the other documents and
agreements executed and delivered in connection herewith to which the Borrower
or any Loan Party is a party have been duly executed and delivered by each of
the Borrower and the other Loan Parties.
6.4 Since July 29, 1998, the Certificate of Incorporation and bylaws of
each of the Loan Parties has not been amended, supplemented or otherwise
modified.
6.5 This Amendment is the legal, valid and binding obligation of the
Borrower and the other documents and agreements executed or delivered in
connection herewith to which any of the Borrower or the other Loan Parties is a
party are the legal, valid and binding obligations of the Borrower and the other
Loan Parties, in each case enforceable against each of the Borrower and the
other Loan Parties in accordance with their respective terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
6.6 The execution, delivery and performance of this Amendment and the other
documents and agreements executed and delivered in connection therewith does not
and will not (i) violate any law, rule, regulation or court order to which any
of the Borrower or the other Loan Parties is subject; (ii) conflict with or
result in a breach of the certificate of incorporation or bylaws of the Borrower
or any of the other Loan Parties or any agreement or instrument to which it is
party or by which the properties of any of the Borrower or the other Loan
Parties are bound; or (iii) result in the creation or imposition of any Lien,
security interest or encumbrance on any property of the Borrower
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or any of the other Loan Parties, whether now owned or hereafter acquired, other
than Liens in favor of the Agent.
6.7 No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority or any other Person is required in
connection with the execution, delivery, performance, validity or enforceability
of (i) this Amendment by the Borrower or (ii) the other documents or agreements
executed or delivered in connection herewith to which any of the Borrower or the
other Loan Parties is party, or the consummation of the transactions
contemplated hereby or thereby, or the continuing operations of any of the
Borrower or the other Loan Parties following the consummation of such
transactions, except for such as have been obtained or made.
6.8 As of March 7, 2001, the aggregate outstanding principal balance of the
Tranche A Term Loans is $4,301,831.69, the aggregate outstanding principal
balance of the Tranche B Term Loans is $19,779,757.55, the aggregate outstanding
principal balance of the Tranche C Term Loans is $11,671,466.61 and the
aggregate outstanding balance of the Revolving Extensions of Credit is
$65,911,995.00, consisting of Revolving Credit Loans in the aggregate amount of
$55,000,000.00 and Letter of Credit Obligations in the aggregate amount of
$10,911,995.00. Interest and fees have accrued thereon as provided in the Credit
Agreement. The obligation of the Borrower and the other Loan Parties to repay
the Loans and the other Obligations, together with all interest and fees accrued
thereon, is absolute and unconditional, and there exists no right of setoff or
recoupment, counterclaim or defense of any nature whatsoever to payment of the
Obligations.
SECTION 7. PAYMENT OF EXPENSES. The Borrower agrees to pay or reimburse the
Agent for all of its reasonable out-of-pocket 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 Agent.
SECTION 8. 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 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.
-14-
SECTION 9. MISCELLANEOUS.
9.1 The Borrower agrees to execute (and to cause each of the other Loan
Parties to execute) such other and further documents and instruments as the
Agent may request to implement the provisions of this Amendment.
9.2 This Amendment shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
No other person or entity shall be entitled to claim any right or benefit
hereunder, including, without limitation, the status of a third-party
beneficiary of this Amendment.
9.3 This Amendment, together with the Credit Agreement and the other Loan
Documents, constitutes the entire agreement and understanding among the parties
relating to the subject matter hereof, and supersedes all prior proposals,
negotiations, agreements and understandings relating to such subject matter. In
entering into this Amendment, the Borrower acknowledges that it is not relying
on any statement, representation, warranty, covenant or agreement of any kind
made by any Agent, any Lender, or any employee, agent or professional of any
Agent or Lender, except for the express written agreements of the Agent and
Lenders set forth herein.
9.4 The provisions of this Amendment are intended to be severable. If any
provision of this Amendment shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or enforceability without in any
manner affecting the validity or enforceability of such provision in any other
jurisdiction or the remaining provisions of this Amendment in any jurisdiction.
9.5 This Amendment may be executed in counterparts and by any party to this
Amendment on separate counterparts, all of which, when so executed, shall be
deemed an original, but all of such counterparts shall constitute one and the
same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be, and effective as, an original signature hereto.
9.6 Any notices with respect to this Amendment shall be given in the manner
provided for in Section 10.2 of the Credit Agreement.
9.7 All representations, warranties, covenants, agreements, undertakings,
waivers and releases of the Borrower contained herein shall survive the
Amendment Effective Date and payment in full of the Obligations.
-15-
9.8 No amendment, modification, rescission, waiver or release of any
provision of this Amendment shall be effective unless the same shall be in
writing and signed by the Borrower and the Required Lenders.
9.9 This Amendment shall constitute a Loan Document.
SECTION 10. RELEASE OF CLAIMS. THE BORROWER HEREBY ACKNOWLEDGES AND AGREES
THAT IT DOES NOT HAVE ANY DEFENSES, COUNTERCLAIMS, OFFSETS, CROSS-COMPLAINTS,
CLAIMS OR DEMANDS OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO
REDUCE OR ELIMINATE ALL OR ANY PART OF LIABILITY OF THE BORROWER TO REPAY ANY
AGENT OR ANY LENDER AS PROVIDED IN THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM
ANY AGENT OR ANY LENDER. THE BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES
AND FOREVER DISCHARGES THE AGENT AND THE LENDERS, AND THE AGENT'S AND EACH
LENDER'S PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL
POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, OR
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST ANY
SUCH AGENT OR LENDER, AND THE AGENT'S OR LENDER'S PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION AND
EXECUTION OF THIS AMENDMENT.
SECTION 11. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. Sections
10.11, 10.12 and 10.14 of the Credit Agreement shall apply to this Amendment and
to any suit, action or proceeding related to this Amendment.
{THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK}
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IN WITNESS WHEREOF, the parties hereof have caused this
amendment to be executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
FRIENDLY ICE CREAM CORPORATION
By:
-------------------------------------------
Name:
Title:
S-1
SOCIETE GENERALE, as Agent and a Lender
By:
-------------------------------------------
Name:
Title:
S-2
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
--------------------------------------------
Name:
Title:
S-3
BLACK DIAMOND INTERNATIONAL
FUNDING, LTD.
By:
--------------------------------------------
Name:
Title:
S-4
BLACK DIAMOND CLO, 1998-I LTD.
By:
--------------------------------------------
Name:
Title:
S-5
BLACK DIAMOND CLO, 2000-I LTD.
By:
--------------------------------------------
Name:
Title:
S-6
FLEET NATIONAL BANK
By:
--------------------------------------------
Name:
Title:
S-7
HIGHLAND LEGACY LTD.
By:
--------------------------------------------
Name:
Title:
S-8
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.
its Agent/Manager
By:
--------------------------------------------
Name:
Title:
S-9
BANK OF AMERICA, N.A.
By:
--------------------------------------------
Name:
Title:
S-10
PAMCO CAYMAN LTD.
By: Highland Capital Management,
L.P., as Collateral Manager
By:
--------------------------------------------
Name:
Title:
S-11
PAM CAPITAL FUNDING, L.P.
By: Highland Capital Management,
L.P., as Collateral Manager
By:
-------------------------------------------
Name:
Title:
S-12
FLEET NATIONAL BANK AS TRUST
ADMINISTRATOR FOR LONG LANE MASTER
TRUST IV
By:
--------------------------------------------
Name:
Title:
S-13
FIRST UNION NATIONAL BANK
By:
-------------------------------------------
Name:
Title:
S-14
FOOTHILL INCOME TRUST, L.P.
By: FIT GP LLC, its General Partner
By:
-------------------------------------------
Name:
Title:
S-15
ACKNOWLEDGMENT, CONSENT AND RELEASE
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 Agent, for the benefit of the Lenders,
hereby (a) consents to the transactions contemplated by this Amendment, (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, (c) acknowledges and agrees that
its obligations under the Guarantee and Collateral Agreement are absolute and
unconditional, and there exists no right of setoff or recoupment, counterclaim
or defense of any nature whatsoever thereto, and (d) HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE LENDERS, AND EACH
AGENT'S AND LENDER'S PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, OR
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THE
FOREGOING AMENDMENT IS EXECUTED, WHICH IT MAY NOW OR HEREAFTER HAVE AGAINST ANY
SUCH AGENT OR LENDER, AND SUCH AGENT'S OR LENDER'S PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER CREDIT DOCUMENTS, AND NEGOTIATION
AND EXECUTION OF THE FOREGOING AMENDMENT.
FRIENDLY'S RESTAURANTS FRANCHISE,
INC.
By:
--------------------------------------------
Name:
Title:
FRIENDLY'S INTERNATIONAL, INC.
By:
--------------------------------------------
Name:
Title: