CREDIT AGREEMENT dated as of May 14, 1999 Among COCO'S RESTAURANTS, INC., CARROWS RESTAURANTS, INC., JOJOS RESTAURANTS, INC., as Borrowers, FRD ACQUISITION CO., FRI-M CORPORATION, as Guarantors, THE LENDERS NAMED HEREIN, CREDIT LYONNAIS NEW YORK BRANCH, as Administrative Agent, and THE CHASE MANHATTAN BANK, as Documentation Agent and Syndication Agent CHASE SECURITIES INC. and CREDIT LYONNAIS NEW YORK BRANCH, as Book Managers TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS
PAGE ---- SECTION 1.01. Defined Terms .............................................................. 1 SECTION 1.02. Terms Generally ............................................................ 18 ARTICLE II THE CREDITS SECTION 2.01. Commitments ................................................................ 18 SECTION 2.02. Loans ...................................................................... 18 SECTION 2.03. Borrowing Procedure ........................................................ 20 SECTION 2.04. Evidence of Debt; Repayment of Loans ....................................... 20 SECTION 2.05. Fees ....................................................................... 21 SECTION 2.06. Interest on Loans .......................................................... 22 SECTION 2.07. Default Interest ........................................................... 22 SECTION 2.08. Alternate Rate of Interest ................................................. 22 SECTION 2.09. Termination and Reduction of Commitments ................................... 22 SECTION 2.10. Conversion and Continuation of Borrowings ................................. 23 SECTION 2.11. Amortization of Term Loans ................................................. 24 SECTION 2.12. Prepayment ................................................................. 24 SECTION 2.13. Reserve Requirements; Change in Circumstances............................... 26 SECTION 2.14. Change in Legality ......................................................... 27 SECTION 2.15. Indemnity................................................................... 27 SECTION 2.16. Pro Rata Treatment.......................................................... 28 SECTION 2.17. Sharing of Setoffs.......................................................... 28 SECTION 2.18. Payments.................................................................... 28 SECTION 2.19. Taxes....................................................................... 29 SECTION 2.20. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate...................................................... 30 SECTION 2.21. Letters of Credit........................................................... 31 SECTION 2.22. Swingline Loans............................................................. 34 ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.01. Organization; Powers ....................................................... 35 SECTION 3.02. Authorization .............................................................. 35 SECTION 3.03. Enforceability ............................................................. 35 SECTION 3.04. Governmental Approvals ..................................................... 35 SECTION 3.05. Financial Statements ....................................................... 36 SECTION 3.06. No Material Adverse Change ................................................. 36 SECTION 3.07. Title to Properties; Possession Under Leases ............................... 36 SECTION 3.08. Subsidiaries ............................................................... 36 SECTION 3.09. Litigation; Compliance with Laws ........................................... 36 SECTION 3.10. Agreements ................................................................. 37 SECTION 3.11. Federal Reserve Regulations ................................................ 37 SECTION 3.12. Investment Company Act; Public Utility Holding Company Act ................. 37 PAGE SECTION 3.13. Use of Proceeds ............................................................ 37 SECTION 3.14. Tax Returns ................................................................ 37 SECTION 3.15. No Material Misstatements .................................................. 37 SECTION 3.16. Employee Benefit Plans ..................................................... 37 SECTION 3.17. Environmental Matters ...................................................... 38 SECTION 3.18. Insurance .................................................................. 39 SECTION 3.19. Security Documents ......................................................... 39 SECTION 3.20. Labor Matters .............................................................. 39 SECTION 3.21. Solvency ................................................................... 39 SECTION 3.22. Year 2000 .................................................................. 40 ARTICLE IV CONDITIONS OF LENDING SECTION 4.01. All Credit Events .......................................................... 40 SECTION 4.02. First Credit Event ......................................................... 41 ARTICLE V AFFIRMATIVE COVENANTS SECTION 5.01. Existence; Businesses and Properties ....................................... 45 SECTION 5.02. Insurance .................................................................. 45 SECTION 5.03. Obligations and Taxes ...................................................... 45 SECTION 5.04. Financial Statements, Reports, etc. ........................................ 46 SECTION 5.05. Litigation and Other Notices ............................................... 47 SECTION 5.06. Employee Benefits .......................................................... 47 SECTION 5.07. Maintaining Records; Access to Properties and Inspections .................. 48 SECTION 5.08. Use of Proceeds ............................................................ 48 SECTION 5.09. Compliance with Environmental Laws ......................................... 48 SECTION 5.10. Preparation of Environmental Reports ....................................... 48 SECTION 5.11. Further Assurances.......................................................... 48 PAGE ARTICLE VI NEGATIVE COVENANTS SECTION 6.01. Indebtedness ............................................................... 49 SECTION 6.02. Liens ...................................................................... 50 SECTION 6.03. Sale and Lease-Back Transactions ........................................... 51 SECTION 6.04. Investments, Loans and Advances ............................................ 51 SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions .................. 52 SECTION 6.06. Dividends and Distributions; Restrictions on Ability of Subsidiaries to Pay Dividends ........................................ 52 SECTION 6.07. Transactions with Affiliates ............................................... 53 SECTION 6.08. Other Indebtedness and Agreements........................................... 54 SECTION 6.09. Operating Leases ........................................................... 54 SECTION 6.10. Capital Expenditures........................................................ 54 SECTION 6.11. Consolidated Total Debt Ratio............................................... 54 SECTION 6.12. Consolidated Senior Secured Debt Ratio...................................... 55 SECTION 6.13. Consolidated Interest Coverage Ratio........................................ 56 SECTION 6.14. Consolidated Fixed Charge Coverage Ratio.................................... 56 SECTION 6.15. Business of FRD, the Borrower and the Subsidiaries.......................... 57 SECTION 6.16. Fiscal Year ................................................................ 57 ARTICLE VII EVENTS OF DEFAULT 58 ARTICLE VIII THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT 60 ARTICLE IX MISCELLANEOUS SECTION 9.01. Notices .................................................................... 62 SECTION 9.02. Survival of Agreement ...................................................... 63 SECTION 9.03. Binding Effect ............................................................. 63 SECTION 9.04. Successors and Assigns ..................................................... 63 SECTION 9.05. Expenses; Indemnity ........................................................ 65 SECTION 9.06. Right of Setoff ............................................................ 66 SECTION 9.07. Applicable Law ............................................................. 66 SECTION 9.08. Waivers; Amendment ......................................................... 67 SECTION 9.09. Interest Rate Limitation ................................................... 67 SECTION 9.10. Entire Agreement ........................................................... 67 SECTION 9.11. WAIVER OF JURY TRIAL ....................................................... 68 SECTION 9.12. Severability ............................................................... 68 SECTION 9.13. Counterparts ............................................................... 68 SECTION 9.14. Headings ................................................................... 68 PAGE SECTION 9.15. Jurisdiction; Consent to Service of Process ................................ 68
EXHIBITS AND SCHEDULES Schedule 1.01(a) Existing Letters of Credit Schedule 1.01(b) Mortgaged Property Schedule 1.01(c) Subsidiary Guarantors Schedule 2.01(a) Revolving Commitments Schedule 2.01(b) Term Commitments Schedule 3.08 Subsidiaries Schedule 3.09 Litigation Schedule 3.17 Environmental Matters Schedule 3.18 Insurance Schedule 3.19(d) Mortgage Filing Offices Schedule 6.01 Indebtedness Schedule 6.02 Indebtedness Schedule 6.06 Agreements Restricting Dividends Exhibit A Form of Administrative Questionnaire Exhibit B Form of Assignment and Acceptance Exhibit C Form of Borrowing Request Exhibit D Form of Indemnity, Subrogation and Contribution Agreement Exhibit E Form of Deed of Trust Exhibit F Form of Parent Guarantee Agreement Exhibit G Form of FRD Guarantee Agreement Exhibit H Form of Pledge Agreement Exhibit I Form of Security Agreement Exhibit J Form of Subsidiary Guarantee Agreement Exhibit K Form of Opinion of Parker, Poe, Adams and Bernstein, L.L.P. Exhibit L Form of Local Counsel Opinion CREDIT AGREEMENT dated as of May 14, 1999 (this "AGREEMENT"), among COCO'S RESTAURANTS, INC., a California corporation, CARROWS RESTAURANTS, INC., a California corporation, JOJO'S RESTAURANTS, INC., a California corporation (each of the foregoing, individually, a "BORROWER" and, collectively, the "BORROWERS"), FRD ACQUISITION CO., a Delaware corporation ("FRD"), FRI-M CORPORATION, a Delaware corporation and a direct wholly owned subsidiary of FRD ("FRI-M"), the Lenders (as defined in Article I), CREDIT LYONNAIS NEW YORK BRANCH, a licensed branch of a banking corporation organized and existing under the laws of the Republic of France ("CL"), as swingline lender (in such capacity, the "SWINGLINE LENDER"), as issuing bank, as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") and as collateral agent (in such capacity, the "COLLATERAL AGENT") for the Lenders, and THE CHASE MANHATTAN BANK, a New York banking corporation ("CHASE"), as documentation agent (in such capacity, the "DOCUMENTATION AGENT") and as syndication agent (in such capacity, the "SYNDICATION AGENT"). The Borrowers have requested the Lenders to extend credit in the form of (a) Term Loans (such term and each other capitalized term used but not otherwise defined herein having the meaning given it in Article I) on the Closing Date, in an aggregate principal amount of $30,000,000 and (b) Revolving Loans at any time and from time to time prior to the Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $40,000,000 minus the aggregate L/C Exposure and Swingline Exposure at such time. The Borrowers have requested the Swingline Lender to extend credit, at any time and from time to time prior to the Maturity Date, in the form of Swingline Loans. The Borrowers have requested the Issuing Banks to issue letters of credit, in an aggregate face amount at any time outstanding not in excess of $20,000,000, to support payment obligations incurred in the ordinary course of business by the Borrowers and their wholly owned subsidiaries. The proceeds of the Loans are to be used solely (a) on the Closing Date, to repay or refinance loans under the Existing Credit Agreement and (b) after the Closing Date, for general corporate purposes. The Lenders and the Swingline Lender are willing to extend such credit to the Borrowers and the Issuing Banks are willing to issue letters of credit for the account of the Borrowers on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings specified below: "ABR BORROWING" shall mean a Borrowing comprised of ABR Loans. "ABR LOAN" shall mean any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Article II. "ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves. 2 "ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such term in Section 2.05(b). "ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative Questionnaire in the form of Exhibit A. "AFFILIATE" shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified. "ALTERNATE BASE RATE" shall mean, for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c), or both, of the preceding sentence, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively. The term "PRIME RATE" shall mean the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective on the date such change is publicly announced as being effective. The term "BASE CD RATE" shall mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate. The term "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "APPLICABLE PERCENTAGE" shall mean, with respect to any Revolving Lender, the percentage of the total Revolving Commitments represented by such Lender's Revolving Commitment. If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments. "APPROVED FUND" shall mean, with respect to any Lender that is a fund that invests in bank loans in the ordinary course of its business, any other fund or trust or entity (a) that invests in bank loans in the ordinary course of its business and (b) with respect to which the same investment advisor as that of such Lender (or an Affiliate of such investment advisor) acts as the sole investment advisor or manager. "ASSESSMENT RATE" shall mean for any date the annual rate (rounded upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the Administrative Agent as the then current net annual assessment rate that will be employed in determining amounts payable by the Administrative Agent to the Federal Deposit Insurance Corporation (or any successor thereto) for insurance by such Corporation (or such successor) of time deposits made in dollars at the Administrative Agent's domestic offices. "ASSET SALE" shall mean any sale, lease, transfer, assignment, loss, damage or destruction (in the case of loss, damage or destruction, to the extent covered by insurance) or other disposition (by merger or otherwise) of assets (including trademarks and other intangibles), business units, individual business assets or property of FRD, any Borrower or any other Subsidiary, including the sale, transfer or disposition of any capital stock or real property, to any person other than FRD, any Borrower or any other Subsidiary; PROVIDED, HOWEVER, that none of the following shall be deemed to be an Asset Sale: (a) the sale of inventory in the ordinary course of business or (b) the sale in the ordinary course of business of damaged, worn out or obsolete assets that are no longer necessary for the proper conduct of FRD's or the applicable Borrower's or other Subsidiary's business. 3 "ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent, in the form of Exhibit B or such other form as shall be approved by the Administrative Agent. "BOARD" shall mean the Board of Governors of the Federal Reserve System of the United States of America. "BORROWING" shall mean a group of Loans of the same Class and Type made by the Lenders on a single date to one or more Borrowers and as to which a single Interest Period is in effect. "BORROWING REQUEST" shall mean a request by one or more Borrowers in accordance with the terms of Section 2.03 and substantially in the form of Exhibit C. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by law to close; PROVIDED, HOWEVER, that when used in connection with a Eurodollar Loan, the term "BUSINESS DAY" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. "CAPEX FINANCING" shall mean, with respect to any Consolidated Capital Expenditure, the incurrence by FRD, any Borrower or any other Subsidiary of any Indebtedness secured (whether such security is limited to principal or otherwise) by a mortgage or other Lien, including any Lien under a Capital Lease Obligation, on the asset that is the subject of such Consolidated Capital Expenditure, to the extent that the Net Cash Proceeds of such Indebtedness do not exceed the amount of such Consolidated Capital Expenditure. "CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations of such person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "CASUALTY" shall have the meaning set forth in the Mortgages. "CASUALTY PROCEEDS" shall have the meaning set forth in the Mortgages. "CHANGE IN CONTROL" shall mean (a) any person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the date hereof) shall own, directly or indirectly, beneficially or of record, shares representing more than 25% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of Parent, PROVIDED that Loomis Sayles Company, Inc., Magten Asset Management Corporation, and Moore Capital Management, Inc. may each own, directly or indirectly, beneficially or of record, shares representing up to 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of Parent without causing a Change of Control; (b) (i) any person (other than Parent) shall own, directly or indirectly, beneficially or of record, any shares of capital stock of FRD or (ii) any person (other than (x) FRD or any wholly owned Subsidiary or (y) solely with respect to its beneficial ownership of shares of capital stock of any Borrower or other Subsidiary through FRD, Parent) shall own, directly or indirectly, beneficially or of record, any shares of capital stock of (A) any Borrower or (B) any other Subsidiary that owns, directly or indirectly, beneficially or of record, any shares of capital stock of any Borrower; (c) a majority of the seats (other than vacant seats) on the board of directors of Parent shall at any time be occupied by persons who were neither (i) nominated by the board of directors of Parent, nor (ii) appointed by directors so nominated; (d) any change in control (or similar event, however denominated) with respect to Parent or FRD shall occur under, and as defined in, any indenture or agreement in respect of Indebtedness to which Parent or FRD is a party; or (e) any person or group shall otherwise directly or indirectly Control Parent or (except for Parent) FRD. "CLASS", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term Loans or Swingline Loans and, when used 4 in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment or Term Commitment. "CLOSING DATE" shall mean the date of the first Credit Event. "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time. "COLLATERAL" shall mean all the "Collateral" as defined in any Security Document and shall also include the Mortgaged Property. "COMMITMENT" shall mean a Revolving Commitment, a Term Commitment or any combination thereof (as the context requires). "COMMITMENT FEE" shall have the meaning assigned to such term in Section 2.05(a). "CONCENTRATION ACCOUNT" shall have the meaning set forth in the Security Agreement. "CONDEMNATION" shall have the meaning set forth in the Mortgages. "CONDEMNATION PROCEEDS" shall have the meaning set forth in the Mortgages. "CONFIDENTIAL INFORMATION MEMORANDUM" shall mean the Confidential Information Memorandum of the Borrowers dated April, 1999, including all attachments, exhibits and appendixes thereto. "CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, without duplication, the sum of the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability) by FRD, the Borrowers and the other Subsidiaries during such period that, in conformity with GAAP, would be included in "additions to property, plant or equipment" or comparable items reflected in the consolidated statement of cash flows of FRD, the Borrowers and the other Subsidiaries for such period, including (a) Capital Lease Obligations and (b) expenditures for equipment that is purchased simultaneously with the trade-in of existing equipment owned by any Borrower or any of the other Subsidiaries to the extent of the gross amount of the purchase price less the book value of the equipment being traded in at such time, but excluding (c) interest capitalized during construction and (d) expenditures made in connection with the replacement or restoration of assets, to the extent reimbursed or financed from insurance proceeds paid on account of the loss of or the damage to the assets being replaced or restored, or from awards of compensation arising from the taking by condemnation or eminent domain of such assets being replaced, and net of cash amounts received by the Borrowers and the other Subsidiaries from other persons during that period in reimbursement of Consolidated Capital Expenditures made by the Borrowers and the other Subsidiaries. "CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period, Consolidated Interest Expense MINUS interest not paid in cash (including amortization of (a) discount and deferred debt expenses and (b) fees with respect to Interest Rate Protection Agreements) payable in connection with the incurrence of Indebtedness to the extent included in interest expense in accordance with GAAP (including fees and expenses in connection with the Transactions). "CONSOLIDATED EBITDA" shall mean with respect to FRD, the Borrowers and the other Subsidiaries for any period, all as determined in accordance with GAAP on a consolidated basis after eliminating intercompany items and any gain or loss resulting from any Asset Sales (other than Asset Sales permitted by Section 6.05(a) or (b)), the net income (or net loss) for such period, PLUS (a) to the extent deducted in computing such net income (or net loss) the sum of (i) depreciation expense, (ii) amortization expense, (iii) other non-cash charges (including to the extent reflected as an expense in determining net income (or net loss) accrued but unpaid (A) Permitted Management Fees in an amount not to exceed $10,000,000 in any fiscal year, (B) Permitted Franchise Fees and (C) amounts owed by FRD or the Subsidiaries under the Tax Allocation Agreement), (iv) provisions for LIFO adjustment for inventory valuation, (v) net total Federal, state and local income tax expense, (vi) Consolidated Interest Expense, (vii) extraordinary losses, (viii) any non-recurring charge or restructuring charge that in accordance with GAAP is excluded from operating 5 income and (ix) the cumulative effect of any change in accounting principles as shown on FRD's consolidated statement of income for such period MINUS (b) extraordinary gains MINUS (c) the amount of cash expended in such period in respect of (i) any amount that, under clause (a)(viii) above, was taken into account in determining Consolidated EBITDA for such or any prior period or (ii) any previously accrued but unpaid (A) Permitted Management Fees, (B) Permitted Franchise Fees or (C) amounts owed by FRD or the Subsidiaries under the Tax Allocation Agreement. "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any period, the ratio of (a) the sum of (i) Consolidated EBITDA for such period and (ii) Consolidated Lease Expense for such period to (b) the sum of (i) Consolidated Cash Interest Expense for such period and (ii) Consolidated Lease Expense for such period. "CONSOLIDATED INTEREST COVERAGE RATIO" shall mean, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest Expense for such period. "CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, all interest expense (including the interest component in respect of Capital Lease Obligations), net of interest income, accrued or paid by FRD, the Borrowers and the other Subsidiaries during such period in respect of Indebtedness of FRD, the Borrowers and the other Subsidiaries, including (a) any amortization of initial debt discount or any fees (including fees with respect to Interest Rate Protection Agreements) payable in connection with the incurrence of Indebtedness to the extent included in interest expense in accordance with GAAP (including fees and expenses in connection with the Transactions), (b) any commitment fees, agent's and other regularly scheduled fees and charges in respect of such Indebtedness, (c) commissions and other fees and charges payable in connection with letters of credit, (d) the net payment, if any, payable in connection with all interest rate protection contracts and (e) interest capitalized during construction, all determined on a consolidated basis in accordance with GAAP after eliminating all intercompany items. "CONSOLIDATED LEASE EXPENSE" shall mean, for any period, all payment obligations of FRD, the Borrowers and the other Subsidiaries during such period under Operating Leases, as determined on a consolidated basis for FRD, the Borrowers and the other Subsidiaries in accordance with GAAP. "CONSOLIDATED SENIOR SECURED DEBT" shall mean, at any date and without duplication, Consolidated Total Debt at such date MINUS (a) the aggregate principal amount of Senior Notes outstanding on such date and (b) to the extent included in computing such Consolidated Total Debt, the aggregate amount of other unsecured Indebtedness of FRD, the Borrowers and the other Subsidiaries at such date on a consolidated basis in accordance with GAAP. "CONSOLIDATED SENIOR SECURED DEBT RATIO" shall mean, for any period, the ratio of (a) Consolidated Senior Secured Debt on the last day of such period to (b) Consolidated EBITDA for such period. "CONSOLIDATED TOTAL DEBT" shall mean, at any date and without duplication, the aggregate amount of all Indebtedness of FRD, the Borrowers and the other Subsidiaries at such date on a consolidated basis in accordance with GAAP (other than (a) the undrawn amount of outstanding letters of credit, (b)(i) Indebtedness of the type described in clause (g) of the definition of the term "Indebtedness" or (ii) Indebtedness of the type referred to in clause (h) or (i) or the final sentence of such definition to the extent that the Indebtedness of the other person referred to in such clause (h) or (i) or such final sentence is Indebtedness of the type referred to in clause (a) or (b)(i) above and (c) accrued but unpaid (i) Permitted Management Fees accruing in an amount not to exceed $10,000,000 in any fiscal year, (ii) Permitted Franchise Fees and (iii) amounts owed by FRD or the Subsidiaries under the Tax Allocation Agreement). "CONSOLIDATED TOTAL DEBT RATIO" shall mean, for any period, the ratio of (a) Consolidated Total Debt on the last day of such period to (b) Consolidated EBITDA for such period. "CONTROL" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" shall have meanings correlative thereto. 6 "CREDIT EVENT" shall have the meaning assigned to such term in Section 4.01. "DEFAULT" shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default. "DISBURSEMENT ACCOUNT" shall mean the account established at an office of the Administrative Agent located in New York City, in the name of the Borrowers. "DOLLARS" or "$" shall mean lawful money of the United States of America. "DOMESTIC SUBSIDIARIES" shall mean all Subsidiaries incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia. "ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank having total assets in excess of $500,000,000; (b) a finance company, insurance company or other financial institution or fund, in each case acceptable to the Administrative Agent, that in the ordinary course of business extends credit of the type represented by the Loans and has total assets in excess of $200,000,000 and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of ERISA; (c) an Approved Fund; and (d) any other financial institution reasonably satisfactory to FRD and the Administrative Agent. "ENVIRONMENT" shall mean ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, the workplace or as otherwise defined in any Environmental Law. "ENVIRONMENTAL CLAIM" shall mean any written accusation, allegation, notice of violation, claim, demand, order, directive, cost recovery action or other cause of action by, or on behalf of, any Governmental Authority or any other person not a party to this Agreement for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon (a) the existence, or the continuation of the existence, of a Release (including sudden or non-sudden, accidental or non-accidental Releases), (b) exposure to any Hazardous Material, (c) the presence, use, handling, transportation, storage, treatment or disposal of any Hazardous Material or (d) the violation or alleged violation of any Environmental Law or Environmental Permit. "ENVIRONMENTAL LAW" shall mean any and all applicable present and future treaties, laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material. "ENVIRONMENTAL PERMIT" shall mean any permit, approval, authorization, certificate, license, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law. "EQUITY INTERESTS" shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a person. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time. "ERISA AFFILIATE" shall mean any trade or business (whether or not incorporated) that, together with Parent, FRD or any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. 7 "ERISA EVENT" shall mean (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than events the reporting of which has been waived by the PBGC); (b) the adoption of any amendment to a Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of Parent, FRD or any Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the receipt by any Borrower or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (h) the occurrence of a "PROHIBITED TRANSACTION" with respect to which Parent, FRD, any Borrower or any of their respective subsidiaries is a "disqualified person" (within the meaning of Section 4975 of the Code) or with respect to which Parent, FRD, any Borrower or any such subsidiary could otherwise be liable; and (i) any other event or condition with respect to a Plan or Multiemployer Plan that could reasonably be expected to result in liability of Parent, FRD, or any Borrower. "EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar Loans. "EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article II. "EVENT OF DEFAULT" shall have the meaning assigned to such term in Article VII. "EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement dated as of May 23, 1996, as amended prior to the date hereof, among FRD, as guarantor, FRI-M, as borrower, the lenders named therein, Bankers Trust Company, The Chase Manhattan Bank (formerly known as Chemical Bank) and Citicorp USA, Inc., as co- syndication agents, and Credit Lyonnais New York Branch, as administrative agent. "EXISTING LETTERS OF CREDIT" shall mean each letter of credit that (a) was issued under the Existing Credit Agreement for the account of FRI-M, (b) is outstanding on the Closing Date and (c) is listed on Schedule 1.01(a). "EXCESS CASH FLOW" shall mean, for any period, an amount (if positive) equal to: (a) the sum, without duplication, of the amounts for such period of (i) Consolidated EBITDA, adjusted to exclude any gains or losses attributable to Prepayment Events and (ii) the amount (which may be a negative number) representing the difference between Net Working Capital as of the beginning of such period and Net Working Capital as of the end of such period; MINUS (b) the sum, without duplication, of the amounts for such period of: (i) the aggregate principal amount of Indebtedness repaid or prepaid by FRD and the Subsidiaries during such period (excluding (A) Indebtedness in respect of Revolving Loans, Swingline Loans and drawn and unreimbursed Letters of Credit, (B) Term Loans prepaid pursuant to Section 2.12(a), 2.12(c) through (e), (C) repayments or prepayments of Indebtedness financed by incurring other Indebtedness, to the extent that mandatory principal payments in respect of such other Indebtedness would pursuant to this clause (b)(i) be deducted in determining Excess Cash Flow when made and (D) Indebtedness referred to in clauses (v), (vi) and (vii)(B) of Section 6.01(a)); (ii) Consolidated Capital Expenditures for such period, except to the extent that (A) such Consolidated Capital Expenditures are financed with Indebtedness and 8 (B) mandatory principal payments in respect of such Indebtedness would, pursuant to clause (b)(i) above, be deducted in determining Excess Cash Flow when made; (iii) Consolidated Cash Interest Expense for such period; and (iv) current taxes paid or payable in cash with respect to such period based on income of FRD and the Subsidiaries for such period. "FAIR MARKET VALUE" shall mean, with respect to any asset, the value of the consideration obtainable in a sale of such asset in the open market at a specific date assuming a sale by a willing seller to a willing purchaser dealing at arm's length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, which value shall, for any asset with a Fair Market Value in excess of $2,000,000, be either (a) the value of such asset as determined in good faith by the Board of Directors of FRD or (b) if such asset shall have been the subject of an appraisal done reasonably contemporaneously by any independent third party appraiser and the basic assumptions underlying such appraisal are reasonable, the value of such asset as stated in such appraisal. "FEE LETTER" shall mean the Fee Letter dated March 30, 1999, among the Borrowers, Chase and the Administrative Agent relating to the credit facilities being made available to the Borrowers under this Agreement. "FEES" shall mean the Commitment Fees, the Administrative Agent's Fees, the L/C Participation Fees and the Issuing Bank Fees. "FINANCIAL OFFICER" of any corporation shall mean the chief financial officer, principal accounting officer, Treasurer, Assistant Treasurer, or Controller of such corporation. "FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic Subsidiary. "FRD GUARANTEE AGREEMENT" shall mean the FRD Guarantee Agreement, substantially in the Form of Exhibit G, made by FRD and FRI-M in favor of the Administrative Agent for the benefit of the Secured Parties. "GAAP" shall mean generally accepted accounting principles applied on a consistent basis. "GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body. "GUARANTEE" of or by any person shall mean any obligation, contingent or otherwise, of such person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including any obligation of such person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness; PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. "GUARANTEE AGREEMENTS" shall mean the Parent Guarantee Agreement, the FRD Guarantee Agreement and the Subsidiary Guarantee Agreement. "GUARANTORS" shall mean Parent, FRD, the Borrowers and the Subsidiary Guarantors. "HAZARDOUS MATERIALS" shall mean all explosive or radioactive substances or wastes, hazardous or toxic substances or wastes, pollutants or contaminants, including petroleum or petroleum distillates, asbestos 9 or asbestos containing materials, polychlorinated biphenyls ("PCBS"), PCB-containing materials or equipment, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. "INDEBTEDNESS" of any person shall mean, without duplication, (a) all indebtedness of such person for borrowed money; (b) all indebtedness of such person for the deferred purchase price of property or services (other than property, including inventory, and services purchased, and expense accruals and deferred compensation items arising, in the ordinary course of business); (c) all obligations of such person evidenced by notes, bonds, debentures or other similar instruments (other than performance, surety and appeal bonds arising in the ordinary course of business); (d) all indebtedness of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (e) all Capital Lease Obligations of such person; (f) all reimbursement, payment or similar obligations of such person, contingent or otherwise, under acceptance, letter of credit or similar facilities; (g) all obligations of such person in respect of (i) currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in foreign interest rates and (ii) interest rate swap, cap or collar agreements, interest rate future or option contracts and other similar agreements designed to hedge against fluctuations in interest rates; (h) all Guarantees by such person of Indebtedness referred to in clauses (a) through (g) above; and (i) all Indebtedness referred to in clauses (a) through (h) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such person, even though such person has not assumed or become liable for the payment of such Indebtedness. The Indebtedness of any person shall include the Indebtedness of any partnership in which such person is a general partner. Notwithstanding the foregoing, the amount of Indebtedness of FRD and the Subsidiaries (or any of them) shall exclude, for all purposes in this Agreement, the fair market value write-up of indebtedness relating to the fresh-start accounting treatment (in accordance with GAAP) of FRD's consolidated financial statements resulting from Parent's Chapter 11 bankruptcy case commenced in 1997 and its emergence therefrom. "INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" shall mean the Indemnity, Subrogation and Contribution Agreement, substantially in the form of Exhibit D, among the Borrowers, the Subsidiary Guarantors and the Collateral Agent. "INTEREST PAYMENT DATE" shall mean, with respect to any Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months' duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months' duration been applicable to such Borrowing, and, in addition, the date of any prepayment of such Borrowing (other than an ABR Borrowing that is a Revolving Borrowing or a Swingline Loan) or refinancing of such Borrowing (other than an ABR Borrowing that is a Revolving Borrowing or a Swingline Loan) with a Borrowing of a different Type. "INTEREST PERIOD" shall mean (a) as to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, and (b) as to any ABR Borrowing, the period commencing on the date of such Borrowing and ending on the earliest of (i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii) in the case of any ABR Borrowing that is a Term Borrowing, the date such Borrowing is repaid or prepaid in accordance with Section 2.11 or 2.12; PROVIDED, HOWEVER, that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. "INTEREST RATE PROTECTION AGREEMENT" shall mean, (i) any currency swap agreement, currency future or option contract or other similar agreement or arrangement designed to protect any Loan Party against 10 fluctuations in foreign interest rates and (ii) any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate future or option contract or other similar agreement or arrangement designed to protect any Loan Party against fluctuations in interest rates, and, in each case, not entered into for speculation. "ISSUING BANK" shall mean CL, any Affiliate of CL, Chase, any Affiliate of Chase or one or more other issuing banks satisfactory to the Administrative Agent. "ISSUING BANK FEES" shall have the meaning assigned to such term in Section 2.05(c). "L/C COMMITMENT" shall mean the commitment of the Issuing Banks to issue Letters of Credit pursuant to Section 2.21. "L/C DISBURSEMENT" shall mean a payment or disbursement made by the applicable Issuing Bank pursuant to a Letter of Credit. "L/C EXPOSURE" shall mean at any time the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time PLUS (b) the aggregate principal amount of all L/C Disbursements that have not yet been reimbursed at such time. The L/C Exposure of any Revolving Lender at any time shall mean its Applicable Percentage of the aggregate L/C Exposure at such time. "L/C PARTICIPATION FEE" shall have the meaning assigned to such term in Section 2.05(c). "LENDERS" shall mean (a) the financial institutions listed on Schedule 2.01(a) or 2.01(b) (in each case, other than any such financial institution that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any financial institution that has become a party hereto pursuant to an Assignment and Acceptance. Unless the context otherwise requires, the term "LENDERS" shall include the Swingline Lender. "LETTER OF CREDIT" shall mean any letter of credit issued pursuant to Section 2.21. "LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the "LIBO RATE" with respect to such Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits approximately equal in principal amount to such Eurodollar Borrowing and for a maturity comparable to such Interest Period are offered to the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. "LIEN" shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "LIQUOR LICENSE AFFILIATES" shall mean each Affiliate of FRD or any Borrower or any other Subsidiary that may be organized from time to time and the business of which will be limited to the holding of a liquor license for any business maintained by FRD or any Borrower or any other Subsidiary in any jurisdiction where FRD, such Borrower or such other Subsidiary are prohibited from holding a liquor license or where the holding by FRD, such Borrower or any such other Subsidiary of a liquor license would in the best judgment of FRD be impracticable. 11 "LOAN DOCUMENTS" shall mean this Agreement, the Letters of Credit, the Guarantee Agreements, the Security Documents and the Indemnity, Subrogation and Contribution Agreement. "LOAN PARTIES" shall mean the Borrowers and the Guarantors. "LOANS" shall mean the Revolving Loans, the Term Loans and the Swingline Loans. "MANAGEMENT SERVICES AGREEMENT" shall mean the Management Services Agreement dated as of May 23, 1996, between Parent and FRD, as amended by the First Amendment thereto dated as of May 14, 1999, as such agreement may be amended from time to time; PROVIDED that the amended terms of such agreement are no less favorable to FRD than those available to entities unrelated to Parent and PROVIDED further that (A) no effect shall be given to any amendment to the Management Services Agreement for purposes of this Agreement unless it shall have been approved in writing by the Required Lenders and (B) that no amendment shall be made to Section 4(c) of the Management Services Agreement unless it shall have been approved in writing by the Required Lenders. "MARGIN STOCK" shall have the meaning assigned to such term in Regulation U. "MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect on or change in the business, assets, operations, properties, condition (financial or otherwise) contingent liabilities (including but not limited to potential environmental and employee health and safety liabilities), prospects or material agreements of (i) Parent and its subsidiaries, taken as a whole, or (ii) FRD, the Borrowers and the other Subsidiaries, taken as a whole, (b) material impairment of the ability of any Borrower or any other Loan Party to perform any of its obligations under any Loan Document to which it is or will be a party or (c) material impairment of the rights of or benefits available to the Lenders under any Loan Document. "MATURITY DATE" shall mean the fourth anniversary of the Closing Date. "MORTGAGED PROPERTY" shall mean each parcel of owned real property specified on Schedule 1.01(b). "MORTGAGES" shall mean the mortgages, deeds of trust, leasehold mortgages, assignments of leases and rents, modifications and other security documents delivered pursuant to clause (i) of Section 4.02(j) or pursuant to Section 5.11, each substantially in the form of Exhibit E. "MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "NET CASH PROCEEDS" shall mean, with respect to any Asset Sale, Capex Financing or the sale, issuance or other disposition of any Indebtedness or Equity Interests by (or capital contributions to) FRD, any Borrower or any other Subsidiary, the aggregate amount of cash received from time to time by or on behalf of such person in connection with such transaction (including in the case of a Capex Financing any amount of cash received pursuant to such Capex Financing paid to acquire the asset that is the subject of such Capex Financing) after deducting therefrom only (a) reasonable and customary brokerage commissions, underwriting fees and discounts, legal fees, finder's fees and other similar fees and commissions, (b) the amount of taxes and other governmental fees and charges, if any, payable in connection with or as a result of such transaction, (c) in the case of any Asset Sale only, the amount of any Indebtedness secured by a Lien on the asset that is the subject of such Asset Sale that, by the terms of such transaction, is required to be repaid upon such disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, properly attributable to such transaction or to the asset that is the subject of such Asset Sale and are actually paid by such person to a person that is not an Affiliate and (d) in the case of Asset Sales only, an amount of such proceeds equal to the amount of liabilities associated with such asset (including accrued tax liabilities) incurred or retained by the person disposing of such asset as part of such transaction to the extent, and for the period, such liabilities are reserved against in accordance with GAAP or actually paid by such person to a person that is not an Affiliate, PROVIDED that such proceeds shall be deemed received by such person as and when such reserves are no longer maintained and such liabilities are not actually so paid by such person. 12 "NET WORKING CAPITAL" means, at any date, (a) the consolidated current assets of FRD and the Subsidiaries as of such date (excluding cash and Permitted Investments) minus (b) the consolidated current liabilities of FRD and the Subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative. "OBLIGATIONS" shall mean all obligations defined as "Obligations" in the Guarantee Agreements and the Security Documents. "OPERATING LEASES" shall mean, as applied to any person, any lease (including leases that may be terminated by the lessee at any time) by such person of any property (whether real, personal or mixed) that is not required to be classified and accounted for as a capital lease on such person's balance sheet in accordance with GAAP, other than any such lease under which such person is the lessor. "PARENT" shall mean Advantica Restaurant Group, Inc., a Delaware corporation. "PARENT CREDIT AGREEMENT" shall mean the Credit Agreement dated as of January 7, 1998, as amended from time to time heretofore or hereafter, among Parent, certain subsidiaries of Parent, the lenders named therein and Chase, as swingline lender, issuing bank, administrative agent and collateral agent, and shall include any refinancing credit agreement or other credit agreement to which Parent becomes a party hereafter relating to any senior bank financing with respect to Parent or its wholly owned subsidiaries (other than FRD, the Borrowers or the other Subsidiaries) and under which Parent is either a borrower or a guarantor. "PARENT GUARANTEE AGREEMENT" shall mean the Parent Guarantee Agreement, substantially in the form of Exhibit F, made by Parent in favor of the Administrative Agent for the benefit of the Secured Parties. "PARENT INDENTURE" shall have the meaning assigned to such term in Section 4.02(z). "PARENT NOTES" shall have the meaning assigned to such term in Section 4.02(z). "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA. "PERFECTION CERTIFICATE" shall mean the Perfection Certificate substantially in the form of Annex 2 to the Security Agreement. "PERMITTED ADVERTISING FEES" shall mean those advertising fees payable by FRD or any Subsidiary in any fiscal quarter with respect to any of its restaurants pursuant to a Permitted Franchise Agreement, PROVIDED that the amount of such fees does not exceed 3% of such restaurant's net revenue for the immediately preceding fiscal quarter. "PERMITTED AMENDMENTS" means (a) any amendment or supplement to the Senior Notes Documents that does not require a waiver or consent of the holders of the Indebtedness evidenced thereby, other than an amendment or supplement that (i) adds, directly or indirectly, any new provision commonly characterized as an affirmative, negative or financial covenant or any new event of default, collateral requirements or repayment requirement (including any put requirement) that relates to any date prior to 91 days after the Maturity Date, (ii) modifies in any manner adverse to FRD any existing provision commonly characterized as an affirmative, negative or financial covenant or any existing event of default, collateral requirement or repayment requirement (including any shortening of any amortization requirement) that relates to any date prior to 91 days after the Maturity Date or (iii) increases the interest rate thereon or modifies in any manner adverse to FRD the time or manner of payment of such interest (including any option or right to pay such interest in kind) or (b) any amendment or supplement (i) to the Senior Notes Documents that is prohibited under clause (a) above (other than any amendment or supplement prohibited by subclauses (i), (ii) or (iii) of clause (a) above) or (ii) to any other indenture, instrument or agreement pursuant to which any 13 Indebtedness or preferred stock is outstanding that, in each case, is not materially adverse to the interests of the Lenders. "PERMITTED FRANCHISE AGREEMENT" shall mean one or more franchise agreements between FRD and Parent or any of Parent's subsidiaries pursuant to which FRD franchises the Denny's or El Pollo Loco concept from Parent or such subsidiary, as such agreement may be amended from time to time; PROVIDED that (i) the amended terms of such agreement are no less favorable to FRD than those available to franchisees unrelated to Parent, (ii) all up-front and similar fees are waived, (iii) the advertising fees payable by FRD and the Subsidiaries thereunder constitute Permitted Advertising Fees and (iv) no other royalties or fees are payable by FRD or any of the Subsidiaries thereunder except Permitted Royalties and PROVIDED further that no effect shall be given to any amendment to the Permitted Franchise Agreement for purposes of this Agreement unless it shall have been approved in writing by the Required Lenders. "PERMITTED FRANCHISE FEES" shall mean the Permitted Advertising Fees and the Permitted Royalties. "PERMITTED INVESTMENTS" shall mean: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (b) without limiting the provisions of paragraph (d) below, investments in commercial paper maturing within 180 days from the date of acquisition thereof and having, at such date of acquisition, a rating of at least "A-1" or the equivalent thereof from Standard & Poor's Ratings Service or of at least "P-1" or the equivalent thereof from Moody's Investors Service, Inc. or investments in other corporate debt securities maturing within one year from the date of the acquisition thereof and having, at such date of acquisition, a rating of at least "A" or the equivalent thereof from Standard & Poor's Rating Service or of at least "A2" or the equivalent thereof from Moody's Investors Service, Inc.; (c) investments in certificates of deposit, banker's acceptances and time deposits (including Eurodollar time deposits) maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with (i) any U.S. office of the Administrative Agent or any domestic office of Chase or the bank with which the Borrowers and the Subsidiaries maintain their cash management system, provided that if such bank is not a Lender hereunder, such bank shall have entered into an agreement with the Administrative Agent pursuant to which such bank shall have waived all rights of setoff and confirmed that such bank does not have, nor shall it claim, a security interest therein or (ii) any domestic office of any other commercial bank of recognized standing organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000 and is the principal banking subsidiary of a bank holding company having a long-term unsecured debt rating of at least "A" or the equivalent thereof from Standard & Poor's Ratings Service or at least "A2" or the equivalent thereof from Moody's Investors Service, Inc.; (d) investments in commercial paper maturing within 180 days from the date of acquisition thereof and issued by (i) the holding company of Chase or (ii) the holding company of any other commercial bank of recognized standing organized under the laws of the United States of America or any State thereof that has (A) a combined capital and surplus in excess of $500,000,000 and (B) commercial paper rated at least "A-1" or the equivalent thereof from Standard & Poor's Ratings Service or of at least "P-1" or the equivalent thereof from Moody's Investors Service, Inc.; (e) investments in repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (a) above entered into with any office of a bank or trust company meeting the qualifications specified in clause (c) above; and 14 (f) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (a) through (e) above. "PERMITTED LIENS" shall mean (a) Liens imposed by law (other than Environmental Laws and any Lien imposed under ERISA) for taxes, assessments or charges of any Governmental Authority for claims not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (b) statutory and other Liens of landlords, Liens of tenants arising from occupancy rights and statutory Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law (other than Environmental Laws and any Lien imposed under ERISA) created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (c) Liens (other than any Lien imposed under ERISA) incurred or deposits made in the ordinary course of business (including surety bonds and appeal bonds) in connection with workers' compensation, unemployment insurance and other types of social security benefits or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (d) easements (including reciprocal easement agreements and utility agreements), rights-of-way, covenants, consents, reservations, encroachments, variations and zoning and other restrictions, charges or encumbrances (whether or not recorded), which do not interfere materially with the ordinary conduct of the business of any Borrower or any Guarantor, as the case may be, and which do not materially detract from the value of the property to which they attach or materially impair the use thereof to any Borrower or any Guarantor, as the case may be; (e) purchase money Liens upon or in any property acquired or held in the ordinary course of business to secure the purchase price of such property or to secure Indebtedness permitted by Section 6.01(a)(iii) or 6.01(a)(iv), PROVIDED that any such Liens shall be placed on such property (and the Indebtedness secured by such Liens shall be created) within 180 days following the acquisition of such property, such Liens do not apply to any other property or assets of FRD, any Borrower or any Subsidiary and the Indebtedness secured by such Liens does not exceed 100% of the lesser of the cost or Fair Market Value of such property at the time of acquisition; and (f) extensions, renewals or replacements of any Lien referred to in paragraphs (a) through (e) above, PROVIDED that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby. "PERMITTED MANAGEMENT FEE" shall mean a management fee payable to the Parent or any of its subsidiaries (other than FRD and the Subsidiaries) pursuant to the Management Services Agreement in any fiscal quarter in an amount not to exceed (a) 1.0% of net revenues of FRD and the Subsidiaries during the immediately preceding fiscal quarter plus (b) the actual allocated share of the cost of shared administrative services provided by Parent or its subsidiaries (other than FRD or any Subsidiary) to FRD and the Subsidiaries during such quarter (which shall be calculated on a reasonable and consistent basis and shall be certified quarterly by a certificate of the Chief Financial Officer of Parent delivered to the Administrative Agent). "PERMITTED ROYALTY" shall mean a royalty payable by FRD or any Subsidiary in any fiscal quarter with respect to any of its restaurants pursuant to a Permitted Franchise Agreement, PROVIDED that the amount of such royalty does not to exceed 4.0% of such restaurant's net revenue for the immediately preceding fiscal quarter. "PERSON" shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership or government, or any agency or political subdivision thereof. "PLAN" shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 307 of ERISA, and in respect of which Parent, FRD, any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. 15 "PLEDGE AGREEMENT" shall mean the Pledge Agreement, substantially in the form of Exhibit H, among the Borrowers, FRD, the Subsidiary Guarantors party thereto and the Collateral Agent for the benefit of the Secured Parties. "PREPAYMENT EVENT" shall mean any event referred to in Section 2.12(c) through (e) that requires the Borrowers to prepay any Borrowing. "REGISTER" shall have the meaning given such term in Section 9.04(d). "REGULATION T" shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "REGULATION U" shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "REGULATION X" shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. "RELATED PARTIES" shall mean, with respect to any person, such person's Affiliates and the respective directors, officers, employees, agents and advisors of such person or such person's Affiliates. "RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, emanating or migrating of any Hazardous Material in, into, onto or through the environment. "REMEDIAL ACTION" shall mean (a) "remedial action" as such term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any Governmental Authority to: (i) cleanup, remove, treat, abate or in any other way address any Hazardous Material in the environment; (ii) prevent the Release or threat of Release, or minimize the further Release, of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health, welfare or the environment; or (iii) perform studies and investigations in connection with, or as a precondition to, (i) or (ii) above. "REQUIRED LENDERS" shall mean, at any time, Lenders having Revolving Exposures, Term Loans and unused Commitments representing more than 50% of the sum of the total Revolving Exposures outstanding, Term Loans outstanding and unused Commitments at such time. "RESPONSIBLE OFFICER" of any corporation shall mean any executive officer or Financial Officer of such corporation and any other officer or similar official thereof responsible for the administration of the obligations of such corporation in respect of this Agreement. "REVOLVING BORROWING" shall mean any Borrowing consisting solely of Revolving Loans. "REVOLVING COMMITMENT" shall mean, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender's Revolving Commitment is set forth on Schedule 2.01(a), or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The aggregate amount of the Lenders' Revolving Commitments is $40,000,000. "REVOLVING EXPOSURE" shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Revolving Loans and its L/C Exposure and Swingline Exposure at such time. 16 "REVOLVING LENDER" shall mean a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure. "REVOLVING LOAN" shall mean a loan made by the Lenders to the Borrowers pursuant to clause (b) of Section 2.01. Each Revolving Loan shall be a Eurodollar Loan or an ABR Loan. "SECURED PARTIES" shall have the meaning assigned to such term in the Security Agreement. "SECURITY AGREEMENT" shall mean the Security Agreement, substantially in the form of Exhibit I, among FRD, the Borrowers, the Subsidiary Guarantors party thereto and the Collateral Agent for the benefit of the Secured Parties. "SECURITY DOCUMENTS" shall mean the Mortgages, the Security Agreement, the Pledge Agreement and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to any of the foregoing or pursuant to Section 5.11. "SENIOR NOTES" shall mean FRD's 12 1/2% Senior Notes due 2004. "SENIOR NOTES DOCUMENTS" shall mean the Senior Notes, the Senior Notes Indenture and all material agreements, documents and instruments related thereto, in each case as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof and thereof. "SENIOR NOTES INDENTURE" shall mean the Indenture dated May 23, 1996, between FRD and the Bank of New York, as trustee, as amended by Supplemental Indenture between the parties thereto dated August 23, 1996, and as further amended, supplemented or otherwise modified from time to time in accordance with the terms hereof and thereof. "STATUTORY RESERVES" shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent, Chase or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over $100,000 with maturities approximately equal to three months, and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as defined in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "SUBSIDIARY" shall mean, with respect to any person (herein referred to as the "PARENT"), any corporation, partnership, association or other business entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "SUBSIDIARY" shall mean any subsidiary of FRD. "SUBSIDIARY GUARANTEE AGREEMENT" shall mean the Subsidiary Guarantee Agreement, substantially in the form of Exhibit J, made by the Subsidiary Guarantors in favor of the Administrative Agent for the benefit of the Secured Parties. "SUBSIDIARY GUARANTOR" shall mean each Subsidiary listed on Schedule 1.01(c), and each other Subsidiary that is or becomes a party to a Subsidiary Guarantee Agreement. 17 "SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.22, as the same may be reduced from time to time pursuant to Section 2.09. "SWINGLINE EXPOSURE" shall mean at any time the aggregate principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the aggregate Swingline Exposure at such time. "SWINGLINE LOAN" shall mean any loan made by the Swingline Lender pursuant to Section 2.22(a). "TAX ALLOCATION AGREEMENT" means the Tax Sharing and Allocation Agreement among Parent, FRD and the Subsidiaries, as in effect on the date hereof and as such agreement may be amended from time to time; PROVIDED that no effect shall be given to any amendment to the Tax Allocation Agreement for purposes of this Agreement unless it shall have been approved in writing by the Required Lenders. "TERM BORROWING" shall mean any Borrowing consisting solely of Term Loans. "TERM COMMITMENT" shall mean, with respect to each Lender, the commitment, if any, of such Lender to make a Term Loan hereunder on the Closing Date, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Lender hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender's Term Commitment is set forth on Schedule 2.01(b), or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Term Commitment, as applicable. The aggregate amount of the Lenders' Term Commitments is $30,000,000. "TERM LENDER" shall mean a Lender with a Term Commitment or an outstanding Term Loan. "TERM LOAN" shall mean a Loan made pursuant to clause (a) of Section 2.01. Each Term Loan shall be a Eurodollar Loan or an ABR Loan. "THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day shall not be a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate shall not be so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three-month certificates of deposit of major money center banks in New York City received at approximately 10:00 a.m., New York City time, on such day (or, if such day shall not be a Business Day, on the next preceding Business Day) by the Administrative Agent from three New York City negotiable certificate of deposit dealers of recognized standing selected by it. "TRANSACTIONS" shall have the meaning assigned to such term in Section 3.02. "TYPE", when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term "RATE" shall consist of the Adjusted LIBO Rate and the Alternate Base Rate. "WHOLLY OWNED SUBSIDIARY" of any person shall mean a subsidiary of such person of which securities (except for directors' qualifying shares) or other ownership interests representing 100% of the equity and 100% of the ordinary voting power (and, in the case of a partnership, 100% of the general partnership interests) are, at the time any determination is being made, owned, controlled or held by such person or one or more wholly owned subsidiaries of such person or by such person and one or more wholly owned subsidiaries of such person. 18 "WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, (a) any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time and (b) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; PROVIDED, HOWEVER, that for purposes of determining compliance with the covenants contained in Article VI, all accounting terms herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP as in effect on the date of this Agreement and applied on a basis consistent with the application used in the financial statements referred to in Section 3.05. ARTICLE II THE CREDITS SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender (such Lenders initially providing Commitments hereunder as and to the extent set forth on Schedules 2.01(a) and 2.01(b) hereto) agrees, severally and not jointly, (a) to make Term Loans to any Borrower on the Closing Date in a principal amount that will not result in the aggregate principal amount of such Lender's Term Loans exceeding such Lender's Term Commitment and (b) to make Revolving Loans to any Borrower, at any time and from time to time on or after the date hereof, and until the earlier of the Maturity Date and the termination of the Revolving Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that will not result in such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment. Within the limits set forth in the preceding sentence and subject to the terms, conditions and limitations set forth herein, each Borrower may borrow, pay or prepay and reborrow Revolving Loans. Amounts repaid in respect of any Term Loan may not be reborrowed. SECTION 2.02. LOANS. (a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class; PROVIDED, HOWEVER, that the failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). The Loans (other than Swingline Loans) comprising any Borrowing shall be in an aggregate principal amount that is (i) (A) in the case of Eurodollar Borrowings, an integral multiple of $500,000 and not less than $1,000,000 and (B) in the case of ABR Borrowings, an integral multiple of $100,000 and not less than $500,000 or (ii) in the case of Revolving Loans, equal to the remaining available balance of the total Revolving Commitments, PROVIDED that (X) an ABR Borrowing may be made in an aggregate amount that is required to finance the reimbursement of an L/C Disbursement as contemplated by Section 2.21(e) and (Y) for the purposes of clauses (i) and (ii) above, the aggregate principal amount of any Borrowing shall equal the aggregate principal amount of all Loans made pursuant to such Borrowing, whether or not such Loans are requested by the same Borrower. (b) Subject to Sections 2.08, 2.14 and 2.22(d), each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan, PROVIDED that any exercise of such option shall not affect the obligation of such 19 Borrower to repay such Loan in accordance with the terms of this Agreement. Borrowings of more than one Type and Class may be outstanding at the same time; PROVIDED, HOWEVER, that no Borrower shall be entitled to request any Borrowing that, if made, would result in more than five Eurodollar Borrowings outstanding hereunder at any time. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings. (c) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 12:00 noon, New York City time, PROVIDED that Swingline Loans shall be made as provided in Section 2.22. The Administrative Agent shall use reasonable efforts to credit by 2:00 p.m., New York City time, the amounts so received to the Disbursement Account (PROVIDED that ABR Loans made to finance the reimbursement of an L/C Disbursement as provided in Section 2.21(e) shall be remitted by the Administrative Agent to the Issuing Bank) or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders. (d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (c) above and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount. If the Administrative Agent shall have so made funds available then, to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and the applicable Borrower (without prejudice to any claims of such Borrower against such Lender with respect to such Borrowing) severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to such Borrower until the date such amount is repaid to the Administrative Agent at (i) in the case of any Borrower, the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lender's Loan as part of such Borrowing for purposes of this Agreement. (e) Notwithstanding any other provision of this Agreement, no Borrower shall be entitled to request any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date. (f) Any Borrower may refinance all or any part of a Revolving Borrowing with another Revolving Borrowing, subject to the conditions and limitations set forth in this Agreement. Any Revolving Borrowing or part thereof so refinanced shall be deemed to be repaid or prepaid in accordance with the applicable provisions of this Agreement with the proceeds of the new Revolving Borrowing, and the proceeds of such new Revolving Borrowing, to the extent they do not exceed the principal amount of the Revolving Borrowing being refinanced, shall not be paid by the Lenders to the Administrative Agent or by the Administrative Agent to such Borrower pursuant to paragraph (c) above; PROVIDED, HOWEVER, that (i) if the principal amount extended by a Lender in a refinancing is greater than the principal amount extended by such Lender in the Revolving Borrowing being refinanced then such Lender shall pay such difference to the Administrative Agent for distribution to the Lenders described in clause (ii) below, (ii) if the principal amount extended by a Lender in the Revolving Borrowing being refinanced is greater than the principal amount being extended by such Lender in the refinancing, the Administrative Agent shall return the difference to such Lender out of amounts received pursuant to clause (i) above, and (iii) to the extent any Lender fails to pay the Administrative Agent amounts due from it pursuant to clause (i) above, any Revolving Loan or portion thereof being refinanced shall not be deemed repaid in accordance with Section 2.04 and shall be payable by the applicable Borrower (without prejudice to any claims of such Borrower against such Lender with respect to such Revolving Borrowing). (g) If the Borrowers fail to make any payment required by Section 2.21(e) when due, the Administrative Agent shall notify each Revolving Lender of the applicable L/C Disbursement, the payment 20 then due from the Borrowers in respect thereof and such Lender's Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.02 with respect to Revolving Loans made by such Lender (and Section 2.02 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from any Borrower pursuant to Section 2.21(e), the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the applicable Issuing Bank, then to such Lenders and the applicable Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the applicable Issuing Bank for any L/C Disbursement (other than the funding of ABR Loans or a Swingline Loan as contemplated by Section 2.21(e)) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such L/C Disbursement. If the Issuing Bank shall make any L/C Disbursement, then, unless the Borrowers shall reimburse such L/C Disbursement in full on the date such L/C Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such L/C Disbursement is made to but excluding the date that the Borrowers reimburse such L/C Disbursement, at the rate per annum then applicable to ABR Loans, PROVIDED that, if the Borrower fails to reimburse such L/C Disbursement when due pursuant to paragraph (e) of Section 2.21, then Section 2.07 shall apply. Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to this paragraph (g) to reimburse the applicable Issuing Bank shall be for the account of such Lender to the extent of such payment. SECTION 2.03. BORROWING PROCEDURE. In order to request a Borrowing (other than a Swingline Loan, as to which this Section 2.03 shall not apply), the applicable Borrower shall hand-deliver or telecopy to the Administrative Agent a duly completed Borrowing Request (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than 11:30 a.m., New York City time, on the date of the proposed Borrowing. Each Borrowing Request shall be irrevocable, shall be signed by or on behalf of the applicable Borrower and shall specify the following information: (i) whether the Borrowing then being requested is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business Day); (iii) the number and location of the account to which funds are to be disbursed (which shall be an account that complies with the requirements of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto; PROVIDED, HOWEVER, that, notwithstanding any contrary specification in any Borrowing Request, each requested Borrowing shall comply with the requirements set forth in Section 2.02. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is specified in any such notice, then such Borrower(s) shall be deemed to have selected an Interest Period of one month's duration. The Administrative Agent shall promptly advise the Lenders of any notice given pursuant to this Section 2.03 (and the contents thereof), and of each Lender's portion of the requested Borrowing. If any Borrower shall not have delivered a Borrowing Request in accordance with this Section 2.03 prior to the end of the Interest Period then in effect for any Borrowing requesting that such Borrowing be refinanced, then such Borrower shall (unless such Borrower has notified the Administrative Agent, not less than three Business Days prior to the end of such Interest Period, that such Borrowing is to be repaid at the end of such Interest Period) be deemed to have delivered a Borrowing Request requesting that such Borrowing be refinanced with a new Borrowing of equivalent amount, and such new Borrowing shall be an ABR Borrowing. SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS. (a) Each Borrower hereby unconditionally promises, jointly and severally, to pay (i) to the Administrative Agent for the account of each Lender, the then unpaid principal amount of each Revolving Loan of such Lender on the Maturity Date, (ii) to the Administrative Agent for the account of each Lender, the then unpaid principal amount of each Term Loan of such Lender pursuant to Section 2.11 and (iii) to the Swingline Lender, the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is 21 made that is the 15th or last day of a calender month and is at least five Business Days after such Swingline Loan is made (or on such earlier date on which such Loan shall become due and payable hereunder, pursuant to Article VII or otherwise), PROVIDED that on each date that the Borrowing of a Revolving Loan is made, the Borrower shall repay all Swingline Loans then outstanding. (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid such Lender from time to time under this Agreement. (c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from any Borrower or any Guarantor and each Lender's share thereof. (d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; PROVIDED, HOWEVER, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrowers to repay the Loans in accordance with their terms. (e) Notwithstanding any other provision of this Agreement, in the event any Lender shall request and receive a promissory note payable to such Lender and its registered assigns, the interests represented by such note shall at all times (including after any assignment of all or part of such interests pursuant to Section 9.04) be represented by one or more promissory notes payable to the payee named therein or its registered assigns. SECTION 2.05. FEES. (a) The Borrowers agree, jointly and severally, to pay to each Revolving Lender, through the Administrative Agent, on the last day of March, June, September and December in each year and on each date on which the Revolving Commitment of such Lender shall expire or be terminated as provided herein, a commitment fee (a "COMMITMENT FEE") of 0.75% per annum on the average daily unused amount of the Revolving Commitment (other than the Swingline Commitment) of such Lender during the preceding quarter (or other period commencing with the date hereof or ending with the Maturity Date or the date on which the Revolving Commitments of such Lender shall expire or be terminated). All Commitment Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The Commitment Fee due to each Revolving Lender shall commence to accrue on the date hereof and shall cease to accrue on the date on which the Revolving Commitment of such Lender shall expire or be terminated as provided herein. For purposes of calculating Commitment Fees only, no portion of the Revolving Commitments shall be deemed utilized under Section 2.16 as a result of outstanding Swingline Loans. (b) The Borrowers agree, jointly and severally, to pay to the Administrative Agent, for its own account, the administrative fees set forth in the Fee Letter at the times and in the amounts specified therein (the "ADMINISTRATIVE AGENT FEES"). (c) The Borrowers agree, jointly and severally, to pay (i) to each Lender, through the Administrative Agent, on the last day of March, June, September and December of each year and on the date on which the Revolving Commitment of such Lender shall be terminated as provided herein, a fee (an "L/C PARTICIPATION FEE") calculated on such Lender's Applicable Percentage of the average daily aggregate L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C Disbursements) during the preceding quarter (or shorter period commencing with the date hereof or ending with the Maturity Date or the date on which all Letters of Credit have been canceled or have expired and the Revolving Commitments of all Revolving Lenders shall have been terminated) at a rate per annum equal to 3.00%, and (ii) to the applicable Issuing Bank a fronting fee, which shall accrue at the rate of 0.25% per annum on the average daily aggregate L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C Disbursements) during the 22 preceding quarter (or shorter period commencing with the date hereof or ending with the Maturity Date or that date on which all Letters of Credit have been canceled or have expired and the Revolving Commitments of all Revolving Lenders shall have been terminated), as well as the standard issuance and drawing fees specified from time to time by the applicable Issuing Bank (the "ISSUING BANK FEES"). All L/C Participation Fees and Issuing Bank Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders, except that the Issuing Bank Fees shall be paid directly to the applicable Issuing Bank. Once paid, none of the Fees shall be refundable under any circumstances. SECTION 2.06. INTEREST ON LOANS. (a) Subject to the provisions of Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan, shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when the Alternate Base Rate is determined by reference to the Prime Rate and over a year of 360 days at all other times) at a rate per annum equal to the Alternate Base Rate plus 2.00%. (b) Subject to the provisions of Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus 3.00%. Interest on each Loan shall be payable on the Interest Payment Dates applicable to such Loan except as otherwise provided in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as the case may be, shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. SECTION 2.07. DEFAULT INTEREST. If any Borrower shall default in the payment of the principal of or interest on any Loan or any other amount becoming due hereunder, by acceleration or otherwise, or under any other Loan Document, such Borrower shall on demand from time to time pay interest, to the extent permitted by law, on such defaulted amount to but excluding the date of actual payment (after as well as before judgment) (a) in the case of overdue principal of any Loan, at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when determined by reference to the Prime Rate and over a year of 360 days at all other times) equal to the sum of the Alternate Base Rate plus 4.00%. SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Borrowing the Administrative Agent shall have determined that dollar deposits in the principal amounts of the Loans comprising such Borrowing are not generally available in the London interbank market, or that the rates at which such dollar deposits are being offered will not adequately and fairly reflect the cost to any Lender of making or maintaining its Eurodollar Loan during such Interest Period, or that reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter, give written or telecopy notice of such determination to the Borrowers and the Lenders. In the event of any such determination, until the Administrative Agent shall have advised the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist, any request by a Borrower for a Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to be a request for an ABR Borrowing. Each determination by the Administrative Agent hereunder shall be conclusive absent manifest error. SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless previously terminated, (i) the Term Commitments shall automatically terminate at 5:00 p.m., New York City time, on the Closing Date and (ii) the Revolving Commitments, the Swingline Commitment and the L/C Commitment shall automatically terminate on the Maturity Date. Notwithstanding the foregoing, all the Commitments shall automatically terminate at 5:00 p.m., New York City time, on May 31, 1999, if the initial Credit Event shall not have occurred by such time. 23 (b) Upon at least three Business Days' prior irrevocable written or telecopy notice to the Administrative Agent, the Borrowers may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Commitments of any Class; PROVIDED, HOWEVER, that (i) each partial reduction of the Commitments of any Class shall be in an integral multiple of $500,000 and in a minimum amount of $1,000,000 and (ii) the Borrowers shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.12, the sum of the Revolving Exposures would exceed the total Revolving Commitments. (c) Each reduction in the Commitments of any Class hereunder shall be made ratably among the Lenders in accordance with their respective Commitments of such Class. The Borrowers shall pay to the Administrative Agent for the account of the applicable Lenders, on the date of each termination or reduction, the Commitment Fees on the amount of the Revolving Commitments so terminated or reduced accrued to but excluding the date of such termination or reduction. SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. Each Borrower shall have the right at any time upon prior irrevocable notice to the Administrative Agent (a) not later than 12:00 noon, New York City time, three Business Days prior to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than 12:00 noon, New York City time, three Business Days prior to conversion or continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest Period, and (c) not later than 12:00 noon, New York City time, three Business Days prior to conversion, to convert the Interest Period with respect to any Eurodollar Borrowing to another permissible Interest Period, subject in each case to the following: (i) each conversion or continuation shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans comprising the converted or continued Borrowing; (ii) if less than all the outstanding principal amount of any Borrowing shall be converted or continued, then each resulting Borrowing shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal amount and maximum number of Borrowings of the relevant Type; (iii) each conversion shall be effected by each Lender and the Administrative Agent by recording for the account of such Lender the new Loan of such Lender resulting from such conversion and reducing the Loan (or portion thereof) of such Lender being converted by an equivalent principal amount; accrued interest on any Eurodollar Loan (or portion thereof) being converted shall be paid by the Borrower at the time of conversion; (iv) if any Eurodollar Borrowing is converted at a time other than the end of the Interest Period applicable thereto, the Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to Section 2.15; (v) any portion of a Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a Eurodollar Borrowing; (vi) any portion of a Eurodollar Borrowing that cannot be converted into or continued as a Eurodollar Borrowing by reason of the immediately preceding clause shall be automatically converted at the end of the Interest Period in effect for such Borrowing into an ABR Borrowing; and (vii) upon notice to the Borrowers from the Administrative Agent given at the request of the Required Lenders, after the occurrence and during the continuance of a Default or Event of Default, no outstanding Loan may be converted into, or continued as, a Eurodollar Loan. Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Borrowing that any Borrower requests be converted or continued, (ii) whether such Borrowing is to be converted to or continued as a Eurodollar Borrowing or an 24 ABR Borrowing, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day) and (iv) if such Borrowing is to be converted to or continued as a Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Eurodollar Borrowing, the applicable Borrower shall be deemed to have selected an Interest Period of one month's duration. The Administrative Agent shall advise the Lenders of any notice given pursuant to this Section 2.10 and of each Lender's portion of any converted or continued Borrowing. If the applicable Borrower shall not have given notice in accordance with this Section 2.10 to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into a new Interest Period as an ABR Borrowing. This Section will not apply to Swingline Loans, which may not be converted or continued. SECTION 2.11. AMORTIZATION OF TERM LOANS. (a) Subject to adjustment pursuant to paragraph (c) of this Section, the Borrowers shall repay the Term Borrowings on each date set forth below in the aggregate principal amount set forth opposite such date: DATE AMOUNT ---- ------ June 30, 2001 $2,000,000 September 30, 2001 $2,000,000 December 31, 2001 $2,000,000 March 31, 2002 $3,000,000 June 30, 2002 $3,000,000 September 30, 2002 $3,000,000 December 31, 2002 $3,000,000 March 31, 2003 $6,000,000 May 14, 2003 $6,000,000 (b) To the extent not previously paid, all Term Loans shall be due and payable on the Maturity Date. (c) If the initial aggregate amount of the Lenders' Term Commitments exceeds the aggregate principal amount of Term Loans that are made on the Closing Date, then the scheduled repayments of Term Loans to be made pursuant to this Section shall be reduced ratably by an aggregate amount equal to such excess. Any prepayment of a Term Borrowing shall be applied to reduce the subsequent scheduled repayments of the Term Borrowings to be made pursuant to this Section ratably. (d) Prior to any repayment of any Term Borrowings hereunder, the Borrowers shall select the Borrowing or Borrowings to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 12:00 noon, New York City time, three Business Days before the scheduled date of such repayment. Each repayment of a Term Borrowing shall be applied ratably to the Loans included in the repaid Term Borrowing. Repayments of Term Borrowings shall be accompanied by accrued interest on the amount repaid. SECTION 2.12. PREPAYMENT. (a) Each Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, subject to the requirements of this Section 2.12. 25 (b) In the event of any termination of all the Revolving Commitments, the Borrowers shall prepay all outstanding Revolving Borrowings and replace or cash collateralize all outstanding Letters of Credit on the date of such termination. In the event of any partial reduction of the Revolving Commitments, then (i) at or prior to the effective date of such reduction, the Administrative Agent shall notify the Borrowers and the Lenders of the total Revolving Exposures after giving effect thereto and (ii) if the total Revolving Exposures would exceed the total Revolving Commitments after giving effect to such reduction, then the Borrowers shall, on the date of such reduction and in an amount sufficient to eliminate such excess, first, prepay the then outstanding Revolving Loans (if any) and Swingline Loans (if any) and second, to the extent of any remaining excess (after the prepayment of Revolving Loans and Swingline Loans), replace outstanding Letters of Credit or deposit an amount in cash in a cash collateral account established with the Collateral Agent for the benefit of the Secured Parties. (c) Following the end of each fiscal year of the Borrowers, commencing with the fiscal year ending 1999, the Borrowers shall prepay Term Borrowings (and, to the extent all Term Borrowings have been or, after giving effect to such prepayment, will have been prepaid or repaid, Revolving Borrowings) in an aggregate amount equal to (i) 75% of Excess Cash Flow for such fiscal year MINUS (ii) any prepayments pursuant to Section 2.12(a) of (A) Term Borrowings or (B) to the extent that the Revolving Commitments are permanently reduced in connection therewith, Revolving Borrowings; PROVIDED, HOWEVER, that if the Consolidated Total Debt Ratio for the period of four fiscal quarters most recently ended prior to the date of determination of Excess Cash Flow shall be less than to 3.00 to 1.00, then the Borrowers shall only be required to prepay with respect to such fiscal year an aggregate amount equal to (i) 50% of Excess Cash Flow for such fiscal year MINUS (ii) any prepayments pursuant to Section 2.12(a) of (A) Term Borrowings or (B) to the extent that the Revolving Commitments are permanently reduced in connection therewith, Revolving Borrowings. Each prepayment pursuant to this paragraph shall be made on or before the date on which financial statements are delivered pursuant to Section 5.04(a)(ii) with respect to the fiscal year for which Excess Cash Flow is being calculated (and in any event within 90 days after the end of such fiscal year). (d) In the event that and on each occasion on which any Net Cash Proceeds are received by or on behalf of FRD, the Borrowers or any other Subsidiary with respect to any Asset Sale (other than the Asset Sales permitted by Section 6.05(a), (b), (c), (d) or (e)), the Borrowers shall, within four Business Days after such Net Cash Proceeds are received, prepay Term Borrowings (and, to the extent all Term Borrowings have been or, after giving effect to such prepayment, will have been prepaid or repaid, Revolving Borrowings) in an aggregate amount equal to the amount of such Net Cash Proceeds. (e) In the event that and on each occasion on which any Net Cash Proceeds are received by or on behalf of FRD, the Borrowers or any other Subsidiary with respect to (i) any issuance or other disposition of Indebtedness for money borrowed of FRD, the Borrowers or any other Subsidiary (other than in connection with Indebtedness for money borrowed permitted pursuant to Section 6.01(a)) or (ii) any issuance or other disposition of Equity Interests in, or capital contributions to, FRD, the Borrowers or any other Subsidiary (other than any Asset Sale or any such issuance of Equity Interests to, or capital contributions by, FRD or any Subsidiary), the Borrowers shall, within three Business Days after such Net Cash Proceeds are received, prepay Term Borrowings (and, to the extent all Term Borrowings have been or, after giving effect to such prepayment, will have been prepaid or repaid, Revolving Borrowings) in an aggregate amount equal to the amount of such Net Cash Proceeds. (f) Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrowers shall select (subject to and in accordance with the limitations set forth in Sections 2.12(c), (d) and (e)) the Borrowing to be prepaid and shall specify such selection in the notice of such prepayment delivered in accordance with the immediately succeeding sentence. The Borrowers shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) with respect to Eurodollar Borrowings, by 12:00 noon, New York City time, at least three Business Days prior to the date of prepayment or (ii) with respect to ABR Borrowings and Swingline Loans, on or prior to the date of prepayment before 12:00 noon, New York City time on such date of prepayment. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof. 26 (g) Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid. Each notice of an optional prepayment shall be irrevocable and shall commit the appl