**Exhibit4.1**

 

**AMENDED ANDRESTATED AMENDMENT NO. 4**

**TO REVOLVINGCREDIT AGREEMENT**

 

This AMENDEDAND RESTATED AMENDMENT NO. 4 TO REVOLVING CREDIT AGREEMENT (this “Amendment”)is dated as of February 27,2004, by and among (a) FRIENDLY ICE CREAM CORPORATION, a Massachusettscorporation (the “Borrower”), (b) the Lenders and (c) FLEET NATIONALBANK, as administrative agent for the Lenders a party to the Revolving CreditAgreement (as hereinafter defined) (in such capacity, the “AdministrativeAgent”).  Capitalized terms as usedand not otherwise defined in this Amendment shall have the meanings assigned tosuch terms in the Revolving Credit Agreement.

 

WHEREAS, theBorrower, the Lenders and the Administrative Agent are parties to that certainRevolving Credit Agreement, dated as of December 17, 2001 (as heretoforeamended or otherwise amended, modified, or amended and restated and in effectimmediately prior to the date hereof, the “Revolving Credit Agreement”;the Revolving Credit Agreement as further amended by this Amendment, the “AmendedRevolving Credit Agreement”);

 

WHEREAS, it is the intent of the partieshereto that this Amendment amend and restate in its entirety that certainAmendment No. 4 to the Revolving Credit Agreement, dated as of February 17,2004, between the Borrower, the Lenders and the Administrative Agent (the “ExistingAmendment No. 4”) and that from the date hereof, the Existing Amendment No.4 be amended and restated in its entirety as set forth herein;

 

WHEREAS, theBorrower has requested that the Lenders (a) amend the Revolving CreditAgreement to increase the Total Commitment, (b) extend the RevolvingCredit Loan Maturity Date, (c) permit the 2004 Refinancing (as defined below)and (d)  agree to certain other amendments and modifications to theRevolving Credit Agreement, in each case as set forth herein;

 

WHEREAS,pursuant to the terms, subject to the conditions and in reliance on therepresentations and warranties contained in this Amendment, the undersignedLenders are prepared to (a) amend the Revolving Credit Agreement to increasethe Total Commitment, (b) extend the Revolving Credit Loan Maturity Date,(c) permit the 2004 Refinancing and (d)  agree to certain other amendmentsand modifications to the Revolving Credit Agreement, in each case as set forthherein;

 

NOW THEREFORE,in consideration of the premises and the mutual covenants contained in thisAmendment, the Borrower, the Administrative Agent and the Lenders hereby agreeas follows:

 

**SECTION1.  Amendment to Revolving CreditAgreement**.

 

**1.1.        **Amendment toSchedules.

 

**(a)          **Schedule 1(a) tothe Revolving Credit Agreement is hereby amended by amended and restating inits entirety by replacing the table located therein as follows:

 

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| **LENDER**                       |   | **COMMITMENT ($)** |
|----------------------------------|--------|--------------------|
|                             |   |               |
| **FLEET NATIONAL BANK**          |   | 15,000,000         |
| 100 Federal Street               |   |               |
| Boston, Massachusetts 02110      |   |               |
|                             |   |               |
| **CITIZEN’S BANK**          |   | 12,000,000         |
| 28 State Street                  |   |               |
| Boston, Massachusetts 02109      |   |               |
|                             |   |               |
| **BANKNORTH, N.A.**              |   |               |
| 1441 Main Street                 |   | 8,000,000          |
| Springfield, Massachusetts 01103 |   |               |
|                             |   |               |
| **TOTAL**                        |   | 35,000,000         |

 

**1.2.        **Certain DefinedTerms.  Section 1.1 of the RevolvingCredit Agreement is hereby amended as follows:

 

**(a)          **by inserting thefollowing new defined term in the appropriate alphabetical sequence in suchSection 1.1:

 

“DeferredCompensation.  Payments of salaryand compensation by Borrower in connection with Borrower’s deferredcompensation plan.”

 

“FourthAmendment Effective Date.  The dateon which all conditions precedent to the Fourth Amendment hereto shall havebeen satisfied or waived by the Lenders.”

 

“New SeniorNotes.  The senior notes issuedpursuant to the New Senior Note Indenture.”

 

“New SeniorNote Indenture. The indenture by and among the Borrower and an indenturetrustee, pursuant to which up to $175,000,000 of New Senior Notes have beenissued or will be issued on terms no less favorable to the Borrower than theSenior Note Indenture.”

 

“Initial Closing Date. December 17, 2001.”

 

“RabbiTrust.  Any trust established forthe satisfaction of obligations of any of the Borrower or its Subsidiaries forDeferred Compensation, the terms of which trust will not, at any time, resultin obligations being treated as funded under applicable Department of Labor orInternal Revenue guidelines as of the Fourth Amendment Effective Date.”

 

“RefinancingIndebtedness.  Indebtedness thatrefunds, refinances, replaces, renews, repays or extends (including pursuant toany defeasance or discharge mechanism) (collectively, “refinances,” and“refinanced” shall have a correlative meaning) any Indebtedness including Indebtednessthat refinances other Refinancing Indebtedness; *provided*, *however*,that (1) the Refinancing Indebtedness has a stated maturity no earlier than thestated maturity of the Indebtedness being refinanced, (2) such RefinancingIndebtedness is incurred in an aggregate principal amount (or if issued withoriginal issue discount, an aggregate issue price) that is equal to or lessthan the sum of the aggregate

 

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principal amount (or if issued with originalissue discount, the aggregate accreted value) then outstanding of theIndebtedness being refinanced plus the amount of accrued and unpaid interest onthe Indebtedness being refinanced, any premium paid to the holders of theIndebtedness being refinanced and reasonable expenses incurred in connectionwith the incurrence of the Refinancing Indebtedness and (3) the material termsof such Refinancing Indebtedness shall be on terms which are not materiallymore onerous on the Borrower than the terms in the Indebtedness beingrefinanced.”

 

“2004Refinancing.  The refinancing of theSenior Notes issued with the proceeds of the New Senior Notes and not more than$13,000,000 of Revolving Credit Loans.”

 

**(b)          **by amending andrestating in their entirety the definitions of “Consolidated Net Income (orDeficit)”, “Change of Control”, “Excess Cash Flow”, “Fixed Charge CoverageRatio”, “Revolving Credit Loan Maturity Date” and “Total Commitment” asfollows:

 

“Consolidated Net Income (or Deficit).  The consolidated net income (or deficit) of the Borrower and itsSubsidiaries, after deduction of all expenses, taxes, and other proper charges,after eliminating therefrom all extraordinary nonrecurring items of income,each as determined in accordance with GAAP and excluding therefrom any chargesassociated with the 2004 Refinancing.”

 

“ExcessCash Flow.  For each fiscal year ofthe Borrower commencing with the Borrower’s 2004 fiscal year, the excess (ifany), of (a) Consolidated EBITDA for such fiscal year, less, (b) the sum(for such fiscal year) of (i) Consolidated Total Interest Expense actually paidin cash by the Borrower and its Subsidiaries, (ii) actual and accrued scheduledprincipal repayments, (iii) all income taxes actually paid in cash by theBorrower and its Subsidiaries, (iv) (A) Capital Expenditures and (B) GrowthCapital Expenditures made in connection with any Permitted Acquisition(excluding Growth Capital Expenditures in an amount equal to such portion ofsuch Permitted Acquisition paid for with the proceeds of Indebtedness permittedpursuant to §9.1(c)(ii)), in each case actually made by the Borrower and itsSubsidiaries in such fiscal year, and (v) any net increase (or, minus,any net decrease) in Consolidated Working Capital from the end of the priorfiscal year.”

 

“FixedCharge Coverage Ratio.  As of anydate of determination, the ratio of (a) Consolidated EBITDAR, minus, the sum of(b)(i) Capital Expenditures (excluding Capital Expenditures made during theBorrower’s 2003 and 2004 fiscal years in connection with the lease of a newMicros POS system not to exceed $5,000,000), 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 accruedduring such period, (y) Rental Expense and (z) mandatory cash contributionsmade by the Borrower to any of its pension plans due to changes in fair marketvalue of pension plan assets (to the extent not already deducted in thecalculation of Consolidated EBITDA).”

 

“Revolving Credit Loan Maturity Date.  June 30, 2007.”

 

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“Total Commitment.  Thesum of the Commitments of the Lenders, as in effect from time to time, andwhich shall be in the aggregate principal amount not to exceed $35,000,000.”

 

**(c)          **by deleting in itsentirety the definition of “Permitted Excess Cash Flow Prepayments”.

 

**1.3.        **MandatoryRepayments of Revolving Credit Loans. Section 3.2(c) of the Revolving Credit Agreement is hereby amended bydeleting the phrase “2002 calendar year” located therein and replacing it withthe phrase “2005 calendar year”.

 

**1.4.        ** Use of Proceeds.  Section 7.17.1 of the Revolving CreditAgreement is hereby amended by amending and restating such Section in itsentirety as follows:

 

“**7.17.1.                 **General**.**Theproceeds of the Loans shall be used for working capital, capital expenditures(to the extent permitted in §10.2 of this Credit Agreement) and generalcorporate purposes.  For the avoidanceof doubt, proceeds of the Loans shall not be used for the repurchase of morethan $13,000,000 of the New Senior Notes.”

 

**1.5.        **Restrictions onIndebtedness.

 

**(a)          **Section 9.1 of theRevolving Credit Agreement is hereby amended by amending and restating clause(c) in its entirety with the following:

 

“(c)Indebtedness incurred in connection with (i) the acquisition after the InitialClosing Date of any real or personal property by the Borrower or any RestrictedSubsidiary or under any Capitalized Lease, provided that (A) the aggregateprincipal amount of such Indebtedness of the Borrower and its RestrictedSubsidiaries incurred after the Fourth Amendment Effective Date shall notexceed the aggregate amount of $10,000,000 at any one time during the periodbeginning on the Fourth Amendment Effective Date and ending on the RevolvingCredit Loan Maturity Date and (B) the Borrower and its Restricted Subsidiariesshall not incur such Indebtedness in an aggregate amount greater than$4,000,000 per fiscal year, and (ii) a Permitted Acquisition;”.

 

**(b)          **Section 9.1 of theRevolving Credit Agreement is hereby amended by inserting the followingadditional clauses at the end of such Section:

 

“(o)               Indebtedness pursuant to the NewSenior Notes and guarantees thereof by Subsidiaries and RefinancingIndebtedness in respect of the foregoing.”

 

**1.6.        **RestrictedPayments.  Section 9.4 of theRevolving Credit Agreement is hereby amended by amending and restating suchSection in its entirety as follows:

 

“**9.4.       RestrictedPayments.** The Borrower will not, and will not permit any of itsSubsidiaries to, make any Restricted Payments other than (a) payments of salaryand compensation to employees and members of the Board of Directors of theBorrower and its

 

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Subsidiaries in the ordinary course ofbusiness and consistent with past practices or as Deferred Compensation, (b)payments of Fees and expenses payable pursuant to this Credit Agreement, and(c) payments to suppliers and customers in the ordinary course of business andconsistent with past practices.”

 

**1.7.        **Permitted Liens.  Section 9.2.1 of the Revolving CreditAgreement is hereby amended by inserting the following additional clause at theend of such Section:

 

“(xx)transfers to any Rabbi Trust in an aggregate amount not to exceed $10,000,000at any time outstanding.”

 

**1.8.        **Restrictions onInvestments.  Section 9.3(b) of theRevolving Credit Agreement is hereby amended by amending and restating it inits entirety as follows:

 

“(b)Investments with respect to Indebtedness permitted by §§ 9.1(d), (g), (h), (i),(j), (k), (l), and (o) and transfers permitted by §9.2.1(xx);”.

 

**1.9.        **Prepayments;Modification of Certain Documents. Section 9.8 of the Revolving Credit Agreement is hereby amended byamending and restating such Section in its entirety as follows:

 

## “**9.8.****Prepayments; Modification of Certain Documents.**

##  

#### (a)   The Borrower will not, and will not permitany of its Subsidiaries to, prepay, redeem or repurchase any of theIndebtedness outstanding under the New Senior Note Indenture, other than inconnection with a refinancing thereof with Refinancing Indebtedness.

####  

#### (b)   The Borrower will not, and will not permitany of its Subsidiaries to, consent to or enter into any amendment, supplementor other modification of any of the terms or provisions contained in, orapplicable to, (i) the New Senior Note Indenture, other than any amendment,supplement, waiver or modification for which no fee is payable to the holdersof the New Senior Notes and which (A) extends the date or reduces the amount ofany required repayment, prepayment or redemption of the principal of such NewSenior Note Indenture, (B) reduces the rate or extends the date for payment ofthe interest, premium (if any) or fees payable on such New Senior NoteIndenture or (C) makes the covenants, events of default or remedies in such NewSenior Note Indenture less restrictive on the Borrower, or (ii) anySale-Leaseback Transaction Documents or FFCA Mortgage Financing Documents, ineach case in any manner that is adverse in any respect to the Lenders unlessconsented to in writing prior thereto by the Required Lenders.”

####  

**1.10.      **Interest Coverage.  Section 10.1 of the Revolving CreditAgreement is hereby amended by amending and restating in its entirety the tableset forth at the end of such Section 10.1 as follows:

 

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| **“Period**                                                        |   | **Ratio** |   |
|-------------------------------------------------------------------------|--------|-----------|--------|
|                                                                    |   |      |   |
| Second and  Third Fiscal Quarters of 2004                               |   | 2.20:1.00 |   |
|                                                                    |   |      |   |
| Fourth  Fiscal Quarter of 2004 and First Fiscal Quarter of 2005         |   | 2.25:1.00 |   |
|                                                                    |   |      |   |
| Second and  Third Fiscal Quarters of 2005                               |   | 2.30:1.00 |   |
|                                                                    |   |      |   |
| Fourth  Fiscal Quarter of 2005 through the Third Fiscal Quarter of 2006 |   | 2.50:1.00 |   |
|                                                                    |   |      |   |
| Fourth  Fiscal Quarter of 2006 and each fiscal quarter thereafter       |   | 2.75:1.00 |   |

 

**1.11.      **Capital Expenditures.  Section 10.2 of the Revolving CreditAgreement is hereby amended by amending and restating in its entirety suchSection as follows:

 

“**10.2.     CapitalExpenditures.**  TheBorrower will not make, or permit any Subsidiary of the Borrower to make (a)Growth Capital Expenditures that exceed, in the aggregate, $7,000,000 perfiscal year, or (b) Capital Expenditures in any fiscal year that exceed, in theaggregate, the amount set forth below opposite such fiscal year and such amountshall include any Growth Capital Expenditures during such fiscal year (provided,that if the Borrower and its Subsidiaries do not utilize the entire amount ofCapital Expenditures permitted in any one fiscal year (beginning withunutilized Capital Expenditures permitted in fiscal year 2003), so long as noDefault or Event of Default exists or would be caused thereby, the Borrower maycarry forward to the immediately succeeding fiscal year $1,000,000 of suchunutilized amount (with Capital Expenditures made by the Borrower or anySubsidiary of the Borrower in such succeeding fiscal year applied last to suchunutilized amount)):

 

| **Fiscal Year** |   | **Capital Expenditures** |       |
|-----------------|--------|--------------------------|------------|
| 2003            |   | $                        | 21,000,000 |   |
| 2004            |   | $                        | 32,000,000 |   |
| 2005            |   | $                        | 30,000,000 |   |
| 2006            |   | $                        | 30,000,000 |   |
| 2007            |   | $                        | 30,000,000 |   |

** **

**1.12.      **Minimum EBITDA.  Section 10.3(a) of the Revolving CreditAgreement is hereby amended by amending and restating in its entirety the tableset forth at the end of such Section 10.3(a) as follows:

 

| **“Period**                                                         |   | **Amount** |             |
|--------------------------------------------------------------------------|--------|------------|------------------|
|                                                                     |   |       |             |
| Second  Fiscal Quarter of 2004 through the Fourth Fiscal Quarter of 2005 |   | $          | 52,000,000       |   |
|                                                                     |   |       |             |   |
| First Fiscal  Quarter of 2006 and each fiscal quarter thereafter         |   | $          | 55,000,000” |   |

 

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**1.13.      **Leverage Ratio.  Section 10.4 of the Revolving CreditAgreement is hereby amended by amending and restating in its entirety the tableset forth at the end of Section 10.4 as follows: 

 

| **“Period**                                                            |   | **Ratio**       |   |
|-----------------------------------------------------------------------------|--------|-----------------|--------|
|                                                                        |   |            |   |
| Second and  Third Fiscal Quarters of 2004                                   |   | 4.75:1.00       |   |
|                                                                        |   |            |   |
| Fourth  Fiscal Quarter of 2004 and First and Second Fiscal Quarters of 2005 |   | 4.50:1.00       |   |
|                                                                        |   |            |   |
| Third Fiscal  Quarter of 2005 through the Second Fiscal Quarter of 2006     |   | 4.25:1.00       |   |
|                                                                        |   |            |   |
| Third Fiscal  Quarter of 2006 and each fiscal quarter thereafter            |   | 4.00:1.00” |   |

 

**1.14.      **Fixed ChargeCoverage Ratio.  Section 10.6 of theRevolving Credit Agreement is hereby amended by amending and restating in itsentirety the table set forth at the end of Section 10.6 as follows: 

 

| **“Period**                                                        |   | **Ratio**       |   |
|-------------------------------------------------------------------------|--------|-----------------|--------|
|                                                                    |   |            |   |
| Second Fiscal Quarter of 2004 through the  First Fiscal Quarter of 2005 |   | 1.00:1.00       |   |
|                                                                    |   |            |   |
| Second Fiscal Quarter of 2005 and each  fiscal quarter thereafter       |   | 1.05:1.00’ |   |

 

**1.15.      **Replacement ofSenior Note Indenture with New Senior Note Indenture.  The Revolving Credit Agreement is herebyamend by replacing each reference to “Senior Note Indenture” contained inSections 8.5.1 and 13.1(f)  with theterm “New Senior Note Indenture”.

 

**SECTION2.  Representations and Warranties**.  The Borrower hereby represents and warrantsto the Administrative Agent and each Lender, on and as of the date hereof, asfollows:

 

**(a)          **This Amendment hasbeen duly executed and delivered by the Borrower.  The execution and delivery by the Borrower of this Amendment andthe performance by the Borrower of this Amendment and the Amended RevolvingCredit Agreement have been duly authorized by proper corporate or otherproceedings by the Borrower, and this Amendment and the Amended RevolvingCredit Agreement constitute the legal, valid and binding obligations of theBorrower, enforceable against the Borrower in accordance with the terms hereofand thereof,

 

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except as enforceability is limited bybankruptcy, insolvency, reorganization, moratorium or other laws relating to oraffecting generally the enforcement of creditors’ rights and general principlesof equity and except to the extent that availability of the remedy of specificperformance or injunctive relief is subject to the discretion of the courtbefore which any proceeding therefor may be brought.

 

**(b)          **No Default or Eventof Default exists on the date hereof after giving effect to the amendments tothe Revolving Credit Agreement effected hereby.

 

**SECTION3.  Effectiveness**.  This Amendment shall be deemed to beeffective as of the Fourth Amendment Effective Date only upon satisfaction ofeach of the following conditions precedent to the Administrative Agent’sreasonable satisfaction, in each case on or prior to (or contemporaneouslywith) the Fourth Amendment Effective Date:

 

**(a)          **Amendment to RevolvingCredit Agreement.  TheAdministrative Agent shall have received duly executed counterpart signaturepages to (1) this Amendment from each of the Borrower and the Lenders and (2)the amended and restated Revolving Credit Notes from the Borrower in favor ofeach of the Lenders, dated as of the Fourth Amendment Effective Date andreflecting the amended amounts set forth on Schedule 1(a) of the AmendedRevolving Credit Agreement (the “Amended Notes”; together with thisAmendment shall be referred to herein as the “Amendment Documents”).  The prior Revolving Credit Notes executed bythe Borrower in favor of each of the Lenders, dated as of the Initial ClosingDate, shall be exchanged for the Amended Notes in a manner, and on terms andconditions, reasonably satisfactory to the Administrative Agent.  The Amendment Documents shall be in fullforce and effect and shall be in form and substance reasonably satisfactory tothe Administrative Agent.

 

**(b)          **Costs andExpenses.  The Borrower shall pay,in accordance with Section 16.2 of the Revolving Credit Agreement, allreasonable out-of-pocket costs and expenses incurred by the AdministrativeAgent in connection with the preparation, negotiation, execution, delivery andenforcement of this Amendment, including, but not limited to, the reasonablefees, expenses and disbursements of Bingham McCutchen LLP.

 

**(c)          **2004 Refinancing.  (i) The New Senior Notes shall have beenissued by the Borrower pursuant to the New Senior Notes Indenture for grossproceeds of not less than $175,000,000 and (ii) the Senior Notes shall havebeen repurchased on the Fourth Amendment Effective Date (or, to the extent notrepurchased on such date, a notice of redemption shall have been delivered tothe trustee for the Senior Notes calling the remaining Senior Notes forredemption within 60 days of the Fourth Amendment Effective Date).

 

**(d)          **Opinion ofCounsel.  The Administrative Agentshall have received from each of (i) Mayer, Brown, Rowe & Maw LLP, counselto the Borrower, and (ii) Choate, Hall & Stewart, counsel to the Borrower,a favorable legal opinion addressed to the Administrative Agent and each of theLenders and dated the Fourth Amendment Effective Date, which opinions shall bein form and substance reasonably satisfactory to the Administrative Agent.

 

**(e)          **Fees.  The Administrative Agent shall have receivedfrom the Borrower the (1)  fee (the “AmendmentFee”) in the amount of (A) $225,000 for the pro rata account of the

 

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Lenders based upon theirCommitments immediately prior to the Fourth Amendment Effective Date and (B)$50,000 for the pro rata account of the Lenders based upon their increase inCommitment in connection with this Amendment and (2) the arrangement fee forthe Administrative Agent’s own account as set forth in that certain letteragreement, dated as of the date hereof, between the Borrower and AdministrativeAgent.

 

**(f)           **CertifiedCopies of Governing Documents and New Senior Note Indenture. TheAdministrative Agent shall have received from the Borrower a certificate of aduly authorized officer of the Borrower, dated as of the Fourth AmendmentEffective Date, certifying that no amendments to any of (1) its charter orother organizational documents as in effect on such date of certification, (2)its by-laws or limited liability company agreement (as the case may be), haveoccurred since the Initial Closing Date and (3) the New Senior Note Indentureand documents executed in connection therewith.

 

**(g)          **Corporate orOther Action; Corporate Structure. All corporate (or other) actionnecessary for the valid execution, delivery and performance by the Borrower ofthe Amendment Documents shall have been duly and effectively taken, andevidence thereof satisfactory to the Lenders shall have been provided to eachof the Lenders. The Administrative Agent shall be reasonably satisfied with theNew Senior Note Indenture and all aspects of the transactions contemplated bythe Amendment Documents.

 

**(h)          **Incumbency Certificates. Each of theLenders shall have received from the Borrower an incumbency certificate, datedas of the Fourth Amendment Effective Date, signed by a duly authorized officerof the Borrower, and giving the name and bearing a specimen signature of eachindividual who shall be authorized to sign, in the name and on behalf of theBorrower, each of the Amendment Documents to which the Borrower is or is tobecome a party.

 

**(i)           **Minimum EBITDA.  The Borrower’s Consolidated EBITDA for thefiscal year ending December 28, 2003 shall not be less than $54,000,000.

 

**(j)           **Leverage Ratio.  The Leverage Ratio for the Reference Periodending December 28, 2003 shall not exceed 4.5:1.00.

 

**SECTION4.  Applicable Law**.  THIS AMENDMENT SHALL BE CONSTRUED ANDENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTSWITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

 

**SECTION5.  Ratification by Guarantors.**  Bytheir signatures below, Friendly’s Restaurants Franchise, Inc. and Friendly’sInternational, Inc. (collectively, the “Guarantors”) (a) ratify and confirmthat certain Guaranty dated as of the Initial Closing Date delivered byGuarantors in connection with the Revolving Credit Agreement (the “Guaranty”),(b) represent the Guaranty is in full force and effect and (c) acknowledge thatthe obligations and liability of the Guarantors thereunder have not beenaffected, diminished or impaired in any manner.

 

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**SECTION6.  Miscellaneous**.

 

**6.1.        **From and after thedate hereof, this Amendment shall be deemed a Loan Document for all purposes ofthe Revolving Credit Agreement and the other Loan Documents and each referenceto Loan Documents in the Revolving Credit Agreement and the other LoanDocuments shall be deemed to include this Amendment.  This Amendment may be executed in any number of counterparts,each of which shall constitute an original but all of which when taken togethershall constitute but one agreement. Delivery of an executed counterpart of a signature page by facsimiletransmission shall be effective as delivery of a manually executed counterpartof this Amendment.

 

**6.2.        **Except as expresslyprovided herein, (a) this Amendment shall not limit the rights of or otherwiseadversely affect the Lenders under the Revolving Credit Agreement or any otherLoan Document, and (b) the Lenders reserve the right to insist on strictcompliance with the terms of the Revolving Credit Agreement and the other LoanDocuments, and the Borrower expressly acknowledges such reservation of rights.  The grant of the consent and waiver hereinwill not, either alone or taken with other waivers of provisions of theRevolving Credit Agreement or any other Loan Document or consents with respectthereto, be deemed to create or be evidence of a course of conduct.  Any future or additional waiver of anyprovision of the Revolving Credit Agreement, or of any other Loan Document towhich the Lenders are a party or have consented, or consent with respectthereto shall be effective only if set forth in a writing separate and distinctfrom this Amendment and duly executed by such parties as are required bySection 16.12 of the Revolving Credit Agreement.

 

**[Remainder ofpage intentionally left blank]**

 

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IN WITNESS WHEREOF, each of the undersignedhas caused this Amendment to be executed and delivered as an agreement as ofthe date first written above.

 
|   | FRIENDLY ICE CREAM CORPORATION |
|--------|--------------------------------|
|   |                           |
|   |                           |
|   | By:                            | /s/ Paul V. Hoagland |   |
|   |                           | Name: Paul V. Hoagland |
|   |                           | Title: Executive Vice President of  Administration |
|   |                           | and Chief Financial Officer |
|   |                           |   |
|   |                           |   |
|   | FLEET NATIONAL BANK,           |
|   |                           | individually and as Administrative Agent |
|   |                           | and as Lender |
|   |                           |
|   |                           |
|   | By:                            | /s/: Robert W. MacEthiney |   |
|   |                           | Name: Robert W. MacEthiney |
|   |                           | Title: Director |
|   |                           |
|   | CITIZENS BANK,                 |
|   |                           | individually and as Lender |
|   |                           |
|   |                           |
|   | By:                            | /s/ Cindy Chen |   |
|   |                           | Name: Cindy Chen |
|   |                           | Title: Vice President |
|   |                           |
|   | BANKNORTH, N.A.,               |
|   |                           | individually and as Lender |
|   |                           |
|   |                           |
|   | By:                            | /s/ Maria P. Goncalves |   |
|   |                           | Name: Maria P. Goncalves |
|   |                           | Title: Vice President |

 

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SECTION 6AGREED TO AND ACCEPTED:

 
| FRIENDLY’S RESTAURANTS FRANCHISE, INC., |
|----------------------------------------------|
|                                         | as Guarantor |
|                                         |
|                                         |
| By:                                          | /s/ Paul V. Hoagland |   |
|                                         | Name: Paul V. Hoagland |
|                                         | Title: Executive Vice President of  Administration |
|                                         | and Chief Financial Officer |
|                                         |   |
|                                         |   |
| FRIENDLY’S INTERNATIONAL, INC.,         |
|                                         | as Guarantor |
|                                         |
|                                         |
| By:                                          | /s/ Paul V. Hoagland |   |
|                                         | Name: Paul V. Hoagland |
|                                         | Title: Executive Vice President of  Administration |
|                                         | and Chief Financial Officer |

 

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