EXHIBIT 4.1(b)
LIMITED WAIVER AND AMENDMENT NO. 2
TO REVOLVING CREDIT AGREEMENT
This LIMITED WAIVER AND AMENDMENT NO. 2 TO REVOLVING CREDIT AGREEMENT
(this "LIMITED WAIVER AND AMENDMENT") is dated as of December 27, 2002, by and
among (a) FRIENDLY ICE CREAM CORPORATION, a Massachusetts corporation (the
"BORROWER"), (b) the undersigned Lenders and (c) FLEET NATIONAL BANK, as
administrative agent for the Lenders a party to the Revolving Credit Agreement
(as hereinafter defined) (in such capacity, the "ADMINISTRATIVE AGENT").
Capitalized terms as used and not otherwise defined in this Limited Waiver and
Amendment shall have the meanings assigned to such terms in the Revolving Credit
Agreement.
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to that certain Revolving Credit Agreement, dated as of December 17,
2001 (as heretofore amended or otherwise amended, modified, or amended and
restated and in effect immediately prior to the date hereof, the "REVOLVING
CREDIT AGREEMENT"; the Revolving Credit Agreement as amended by this Limited
Waiver and Amendment, the "AMENDED REVOLVING CREDIT AGREEMENT");
WHEREAS, the Borrower has requested that the Lenders (a) extend the
Revolving Credit Loan Maturity Date, (b) amend Section 10.2 of the Revolving
Credit Agreement to increase the amount of permitted Capital Expenditures for
fiscal years 2002 and 2003, and (c) otherwise amend the Revolving Credit
Agreement as set forth herein; and
WHEREAS, pursuant to the terms, subject to the conditions and in
reliance on the representations and warranties contained in this Limited Waiver
and Amendment, the undersigned Lenders are prepared to (a) extend the Revolving
Credit Loan Maturity Date, (b) amend Section 10.2 of the Revolving Credit
Agreement to increase the amount of permitted Capital Expenditures for fiscal
years 2002 and 2003, and (c) otherwise amend the Revolving Credit Agreement as
set forth herein;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained in this Limited Waiver and Amendment, the Borrower, the
Administrative Agent and the undersigned Lenders hereby agree as follows.
SECTION 1. AMENDMENT OF CREDIT AGREEMENT.
1.1. CERTAIN DEFINED TERMS. Section 1.1 of the Revolving Credit
Agreement is hereby amended as follows:
(a) by amending and restating in their entirety the definitions of
"Consolidated Tangible Net Worth", "Fixed Charge Coverage Ratio" and "Revolving
Credit Loan Maturity Date" as follows:
"CONSOLIDATED TANGIBLE NET WORTH. The excess of Consolidated
Total Assets over Consolidated Liabilities,
PLUS
(a) all cumulative non-cash adjustments to stockholders' deficit
(or equity) due to changes in fair market value of pension plan assets
net of deferred taxes
and LESS (b) the sum of:
(i) the total book value of all assets of the Borrower properly
classified as intangible assets under GAAP, including such items as
good will, the purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service marks, brand
names, copyrights, patents and licenses, and rights with respect to
the foregoing plus
(ii) all amounts representing any write-up in the book value of any
assets of the Borrower resulting from a revaluation thereof subsequent
to the Balance Sheet Date."
"FIXED CHARGE COVERAGE RATIO. As of any date of determination, the
ratio of (a) Consolidated EBITDAR, minus, the sum of (b)(i) Capital
Expenditures (excluding Capital Expenditures made in connection with
(A) Excess Cash Flow permitted to be used to make Permitted Excess
Cash Flow Prepayments and not used to make such Permitted Excess Cash
Flow Prepayments, (B) unused proceeds in respect of any Excess
Properties Sales or (C) unused proceeds in respect of any Permitted
Unit Sales), and (ii) cash income tax expense, to, the sum of (w)
Consolidated Total Interest Expense payable in cash, (x) actual and
accrued scheduled principal repayments of Indebtedness made or accrued
during such period, (y) Rental Expense, and (z) mandatory cash
contributions made by the Borrower to any of its pension plans due to
changes in fair market value of pension plan assets (to the extent not
already deducted in the calculation of Consolidated EBITDA)."; and
"REVOLVING CREDIT LOAN MATURITY DATE. December 17, 2005.";
(b) the definition of "Excess Cash Flow" appearing in such Section
1.1 is hereby amended by deleting the reference to "2002 and 2003" and replacing
such reference with "2002, 2003 and 2004"; and
(c) the definition of "Excess Cash Flow Period" appearing in such
Section 1.1 is hereby amended by deleting the reference to "2002 and 2003" and
replacing such reference with "2002, 2003 and 2004".
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1.2. FINANCIAL STATEMENTS AND PROJECTIONS. Section 7.4.3 of the
Revolving Credit Agreement is hereby amended by deleting the word "2004" and
inserting in its place the word "2005".
1.3. CAPITAL EXPENDITURES. Section 10.2 of the Revolving Credit
Agreement is hereby amended by amending and restating in its entirety the table
set forth at the end of such Section 10.2 as follows:
"Fiscal Year Capital Expenditures
----------- --------------------
2002 $ 17,000,000
2003 $ 21,000,000
2004 $ 18,000,000
2005 $ 18,000,000"
1.4. MINIMUM EBITDA. Section 10.3(b) of the Revolving Credit
Agreement is hereby amended by amending and restating in its entirety the table
set forth at the end of such Section 10.3(b) as follows:
"Period Amount
------ ------
First Fiscal Quarter of 2003, 2004 and 2005 $ 4,000,000
Second Fiscal Quarter of 2003, 2004 and 2005 $ 14,000,000
Third Fiscal Quarter of 2003, 2004 and 2005 $ 13,000,000
Fourth Fiscal Quarter of 2002, 2003, 2004 and 2005 $ 5,000,000"
1.5. LEVERAGE RATIO. Section 10.4 of the Revolving Credit Agreement
is hereby amended by amending and restating in its entirety the table set forth
at the end of Section 10.4 as follows:
"Period Ratio
------ -----
Fourth Fiscal Quarter of 2002 5.20:1.00
First Fiscal Quarter of 2003 and thereafter 4.75:1.00"
SECTION 2. LIMITED WAIVER. The Lenders hereby waive, solely with
respect to the acquisition of and development by the Borrower of that certain
restaurant location at or near the shopping mall located at 0000 Xxxxx 00 xx
Xxxxxx, Xxx Xxxx (the "Wilton Acquisition"), the application to such Wilton
Acquisition of clause (d) of the definition of "Permitted Acquisitions" in
Section 1.1 of the Revolving Credit Agreement. Notwithstanding the foregoing,
the Borrower hereby acknowledges that all other terms, conditions and
limitations contained in the Revolving
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Credit Agreement, including but not limited to any limitations otherwise
provided by the application of the definition of "Permitted Acquisitions", shall
apply to the Wilton Acquisition.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Administrative Agent and each Lender, on and as
of the date hereof, as follows:
(a) This Limited Waiver and Amendment has been duly executed and
delivered by the Borrower. The execution and delivery by the Borrower of this
Limited Waiver and Amendment and the performance by the Borrower of this Limited
Waiver and Amendment and the Amended Revolving Credit Agreement have been duly
authorized by proper corporate or other proceedings by the Borrower, and this
Limited Waiver and Amendment and the Amended Revolving Credit Agreement
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with the terms hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors'
rights and general principles of equity and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
(b) No Default or Event of Default exists on the date hereof after
giving effect to the amendment of the Revolving Credit Agreement effected by
SECTION 1 hereof, and the limited waiver described in SECTION 2 hereof.
(c) Except for the real property locations set forth on Schedule 1
attached hereto and made a part hereof (each such real property location is also
set forth on Schedule 8.19 (Non-Core Mortgaged Properties) of the Revolving
Credit Agreement), Borrower has obtained the Mortgages required by Section 8.19
of the Revolving Credit Agreement and has otherwise complied with such Section
8.19.
SECTION 4. EFFECTIVENESS. This Limited Waiver and Amendment shall
become effective as of the date hereof only upon satisfaction of each of the
following conditions precedent to the Administrative Agent's satisfaction:
(a) AMENDMENT TO REVOLVING CREDIT AGREEMENT. The Administrative
Agent shall have received duly executed counterpart signature pages to this
Limited Waiver and Amendment from each of the Borrower and the Lenders.
(b) FEES. The Administrative Agent shall have received from the
Borrower the fee (the "AMENDMENT FEE") as set forth in that certain letter
agreement, dated as of the date hereof, between the Borrower and Administrative
Agent.
SECTION 5. APPLICABLE LAW. THIS LIMITED WAIVER AND AMENDMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
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SECTION 6. EXPENSES. The Borrower shall pay, in accordance with
Section 16.2 of the Revolving Credit Agreement, all reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, execution, delivery and enforcement of this Limited
Waiver and Amendment, including, but not limited to, the reasonable fees,
expenses and disbursements of Xxxxxxx XxXxxxxxx LLP.
SECTION 7. MISCELLANEOUS.
7.1. From and after the date hereof, this Limited Waiver and
Amendment shall be deemed a Loan Document for all purposes of the Revolving
Credit Agreement and the other Loan Documents and each reference to Loan
Documents in the Revolving Credit Agreement and the other Loan Documents shall
be deemed to include this Limited Waiver and Amendment. This Limited Waiver and
Amendment may be executed in any number of counterparts, each of which shall
constitute an original but all of which when taken together shall constitute but
one agreement. Delivery of an executed counterpart of a signature page by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Limited Waiver and Amendment.
7.2. Except as expressly provided herein, (a) this Limited Waiver
and Amendment shall not limit the rights of or otherwise adversely affect the
Lenders under the Revolving Credit Agreement or any other Loan Document, and (b)
the Lenders reserve the right to insist on strict compliance with the terms of
the Revolving Credit Agreement and the other Loan Documents, and the Borrower
expressly acknowledges such reservation of rights. The grant of the consent and
waiver herein will not, either alone or taken with other waivers of provisions
of the Revolving Credit Agreement or any other Loan Document or consents with
respect thereto, be deemed to create or be evidence of a course of conduct. Any
future or additional waiver of any provision of the Revolving Credit Agreement,
or of any other Loan Document to which the Lenders are a party or have
consented, or consent with respect thereto shall be effective only if set forth
in a writing separate and distinct from this Limited Waiver and Amendment and
duly executed by such parties as are required by Section 16.12 of the Revolving
Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the undersigned has caused this Limited
Waiver and Amendment to be executed and delivered as an agreement as of the date
first written above.
FRIENDLY ICE CREAM CORPORATION
By:
---------------------------------------
Name:
Title:
FLEET NATIONAL BANK,
individually and as Administrative Agent
and as Lender
By:
---------------------------------------
Name: Xxxx X. Xxx
Title: Vice President
CITIZENS BANK,
individually and as Lender
By:
---------------------------------------
Name:
Title:
BANKNORTH, N.A.,
individually and as Lender
By:
---------------------------------------
Name:
Title:
SCHEDULE 1
SITE # CITY STATE
------ ---- -----
00001 Xxxxxx XX
00000 Xxxxxxxxxxxx XX
00000 South Xxxxxx XX
00000 Xxxxxxxxx XX
00000 Xxxxxxx XX
00000 Xxxxxxx XX
00000 Xxxxxx XX
00000 Xxxxxx XX
00000 Xxxxxxxxxx XX
00446 Xxxxxxx XX
00000 Chicopee MA
00000 Xxxxxxxxx XX
