

                                FRI-M CORPORATION


                                 FIRST AMENDMENT
                       TO CREDIT AGREEMENT, GUARANTIES AND
                          CERTAIN COLLATERAL DOCUMENTS


                  This  FIRST  AMENDMENT  TO CREDIT  AGREEMENT,  GUARANTIES  AND
CERTAIN COLLATERAL  DOCUMENTS (this "Amendment") is dated as of July 1, 1996 and
entered  into  by  and  among  FRD  ACQUISITION  CO.,  a  Delaware   corporation
("Holdings"),  FRI-M CORPORATION, a Delaware corporation ("Company"),  the other
Credit  Support  Parties  (as  defined  in  Section  4  hereof),  THE  FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and  collectively  as  "Lenders"),  BANKERS TRUST  COMPANY,
CHEMICAL BANK and CITICORP USA, INC., as  co-syndication  agents for Lenders (in
such capacity,  each individually referred to herein as a "Co-Syndication Agent"
and  collectively  as  "Co-Syndication  Agents"),  and CREDIT  LYONNAIS NEW YORK
BRANCH, as administrative  agent for Lenders (in such capacity,  "Administrative
Agent"), and is made with reference to that certain Credit Agreement dated as of
May 23, 1996 (the "Credit Agreement"),  by and among Holdings, Company, Lenders,
Co-  Syndication  Agents  and  Administrative  Agent,  and  to  the  other  Loan
Documents.  Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.


                                    RECITALS

                  WHEREAS,  Loan  Parties  and  Lenders  desire to (i) amend the
Credit  Agreement to, among other things,  permit Company to enter into daylight
overdraft  protection  agreements  and make certain  other  changes as set forth
below and (ii) amend the Guaranties  and certain of the Collateral  Documents as
set forth below;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements,  provisions and covenants herein contained, the parties hereto agree
as follows:




                                        1

<PAGE>



                  Section 1.  AMENDMENTS TO THE CREDIT AGREEMENT,
GUARANTIES AND CERTAIN COLLATERAL DOCUMENTS

                  1.1      Amendment  to  Section  1:  Provisions   Relating  to
                           Certain Defined Terms

                  A.  Additional  Defined  Term.  Subsection  1.1 of the  Credit
Agreement is hereby  amended by adding thereto the following  definition,  which
shall be inserted in proper alphabetical order:

                  "`Daylight Overdraft Protection Agreement' means any agreement
         pursuant to which any Person provides bank account overdraft protection
         to Company for account deficiencies  occurring during a Business Day as
         a result  of  checks  written  or wire  transfers  or other  electronic
         transfers  initiated by Company clearing on such Business Day and which
         account  deficiencies  are  expected to be cured with  proceeds of wire
         transfers or checks to be deposited later during such Business Day."

                  B.  Contingent  Obligations.  Subsection  1.1  of  the  Credit
Agreement  is hereby  amended by adding to the end of the first  sentence of the
definition of "Contingent Obligations" the following:

                  "or Daylight Overdraft Protection Agreements."

                  C.  Indebtedness.  Subsection  1.1 of the Credit  Agreement is
hereby  amended by adding to the end of the  definition  of  "Indebtedness"  the
following:

                  "Obligations under Daylight Overdraft  Protection  Agreements,
         unless and until such obligations become matured  obligations  actually
         arising pursuant thereto, do not constitute Indebtedness."

                  1.2      Amendments  to  Section  7:  Provisions  Relating  to
                           Negative Covenants

                  A. Liens and Related  Matters.  Subsection  7.2A of the Credit
Agreement is hereby amended by deleting  clause (ii) thereof in its entirety and
substituting therefor the following:

                  "(ii)  Liens  granted  pursuant to the  Collateral  Documents,
including  Liens  granted in favor of a Lender or an  Affiliate  of such  Lender
which is (a) a  counterparty  to an  Interest  Rate  Agreement  permitted  under
subsection  7.4(iii) or (b) a counterparty  to a Daylight  Overdraft  Protection
Agreement permitted under subsection 7.4(vii);"

                  B.  Contingent  Obligations.  Subsection  7.4  of  the  Credit
Agreement  is hereby  amended  by (i)  deleting  the word  "and" from the end of
clause (v)  thereof and (ii)  adding to the end of such  subsection  immediately
prior to the period the following:


                                        2

<PAGE>



                  
                  "; and

                           (vii)  Company  may  become and  remain  liable  with
                  respect to Contingent  Obligations  under  Daylight  Overdraft
                  Protection  Agreements;  provided that the aggregate amount of
                  overdraft  protection  available under all Daylight  Overdraft
                  Protection   Agreements   shall   not   exceed   at  any  time
                  $5,000,000."

                  1.3 Amendments to Section 9: Provisions Relating to Holdings
Guaranty.

                  A.  Guarantied  Obligations.  Subsection  9.1  of  the  Credit
Agreement is hereby amended by deleting the first sentence of such subsection in
its entirety and substituting therefor the following:

                  "9.1     Guarantied Obligations.

                                    As  consideration  for  Lenders  agreeing to
                  enter into this Agreement and extend the Commitments, make the
                  Loans  hereunder  and issue the  Letters of  Credit,  Holdings
                  hereby  unconditionally  and  irrevocably  guaranties,   as  a
                  primary  obligor  and  not  merely  as a  surety,  the due and
                  punctual  payment  when due  (whether at stated  maturity,  by
                  required   prepayment,   declaration,   demand  or  otherwise)
                  (including amounts that would become due but for the operation
                  of the automatic  stay under Section  362(a) of the Bankruptcy
                  Code,  11 U.S.C.  ss.  362(a)) of all  Obligations  of Company
                  (including,  without  limitation,  interest which, but for the
                  filing of a petition  in  bankruptcy  with  respect to Company
                  would accrue on such Obligations,  whether or not allowable as
                  a claim) and all  obligations  of Company under  Interest Rate
                  Agreements   permitted  under  subsection  7.4(iii)  or  under
                  Daylight  Overdraft  Protection   Agreements  permitted  under
                  subsection  7.4(vii) (all such Interest  Rate  Agreements  and
                  Daylight Overdraft Protection  Agreements,  collectively,  the
                  `Lender  Interest Rate  Agreements'),  in each case to which a
                  Lender or an Affiliate of such Lender (in such capacity  under
                  such Lender Interest Rate Agreements,  collectively, `Interest
                  Rate   Exchangers')   is  a  counterparty   (the   `Guarantied
                  Obligations')."

                  1.4      Amendment to Company Pledge Agreement.

                           Preliminary Statements.  The Company Pledge Agreement
is hereby amended by deleting paragraph C of the Preliminary  Statements thereto
in its entirety and substituting therefor the following:

                           "C.  Pledgor  may from time to time enter into one or
                  more Interest Rate Agreements or Daylight Overdraft Protection
                  Agreements  (all such  Interest Rate  Agreements  and Daylight
                  Overdraft  Protection  Agreements,  collectively,  the `Lender
                  Interest Rate  Agreements')  with one or more Lenders or their
                  Affiliates
                                        3

<PAGE>



                   (in  such  capacity  under  all  such  Lender  Interest  Rate
                   Agreements,  collectively,  `Interest  Rate  Exchangers')  in
                   accordance with the terms of the Credit Agreement,  and it is
                   desired  that the  obligations  of  Pledgor  under the Lender
                   Interest Rate Agreements,  including  without  limitation the
                   obligation of Pledgor to make payments under Lender  Interest
                   Rate  Agreements  that are Interest  Rate  Agreements  in the
                   event of early  termination  thereof (all such obligations in
                   respect  of the Lender  Interest  Rate  Agreements  being the
                   `Interest Rate  Obligations'),  together with all obligations
                   of  Pledgor  under the  Credit  Agreement  and the other Loan
                   Documents, be secured hereunder."

                  1.5 Amendments to Holdings Pledge Agreement, Subsidiary Pledge
Agreement,  Holdings  Security  Agreement,  Subsidiary  Security  Agreement  and
Subsidiary  Trademark  Security  Agreement.  The Holdings Pledge Agreement,  the
Subsidiary Pledge Agreement,  the Holdings  Security  Agreement,  the Subsidiary
Security  Agreement and the  Subsidiary  Trademark  Security  Agreement are each
hereby amended by deleting the text of paragraph C of the Preliminary Statements
of each of the Holdings Pledge  Agreement and the Subsidiary  Pledge  Agreement,
and  the  text  of  paragraph  B of the  Preliminary  Statements  of each of the
Holdings  Security   Agreement,   the  Subsidiary  Security  Agreement  and  the
Subsidiary  Trademark  Security  Agreement,  in each case,  in its  entirety and
substituting therefor the following:

                           "Company  may from  time to time  enter,  or may from
                  time to time  have  entered,  into one or more  Interest  Rate
                  Agreements or Daylight  Overdraft  Protection  Agreements (all
                  such  Interest   Rate   Agreements   and  Daylight   Overdraft
                  Protection Agreements, collectively, the `Lender Interest Rate
                  Agreements')  with one or more Lenders or their Affiliates (in
                  such capacity under all such Lender Interest Rate  Agreements,
                  collectively, `Interest Rate Exchangers')."

                  1.6  Amendments  to Company  Security  Agreement  and  Company
Trademark  Security  Agreement.  The Company Security  Agreement and the Company
Trademark  Security Agreement are each hereby amended by deleting paragraph B of
the  respective  Preliminary  Statements of each such document in their entirety
and substituting therefor the following:

                           "B.  Grantor  may from time to time enter into one or
                  more Interest Rate Agreements or Daylight Overdraft Protection
                  Agreements  (all such  Interest  Rate  Agreements  or Daylight
                  Overdraft  Protection  Agreements,  collectively,  the `Lender
                  Interest Rate  Agreements')  with one or more Lenders or their
                  Affiliates  (in such capacity  under all such Lender  Interest
                  Rate Agreements,  collectively, `Interest Rate Exchangers') in
                  accordance with the terms of the Credit  Agreement,  and it is
                  desired  that the  obligations  of  Grantor  under the  Lender
                  Interest Rate  Agreements,  including  without  limitation the
                  obligation of Grantor to make payments  under Lender  Interest
                  Rate Agreements that are Interest Rate Agreements in the event
                  of early  termination  thereof (all such obligations under all
                  such Lender Interest Rate Agreements  being the `Interest Rate
                  Obligations'),
                                        4

<PAGE>




                  together with all obligations of Grantor under
                  the Credit Agreement and the other Loan Documents,  be secured
                  hereunder."

                   1.7 Amendment to Subsidiary Guaranty. The Subsidiary Guaranty
is hereby  amended  by  deleting  paragraph  B of the  Recitals  thereto  in its
entirety and substituting therefor the following:

                           "B.  Company  may from time to time enter into one or
                  more Interest Rate Agreements or Daylight Overdraft Protection
                  Agreements   (such   Interest  Rate   Agreements  or  Daylight
                  Overdraft  Protection  Agreements,  collectively,  the `Lender
                  Interest Rate  Agreements')  with one or more Lenders or their
                  Affiliates  (in such capacity  under all such Lender  Interest
                  Rate Agreements,  collectively, `Interest Rate Exchangers') in
                  accordance with the terms of the Credit  Agreement,  and it is
                  desired  that the  obligations  of  Company  under the  Lender
                  Interest Rate  Agreements,  including  without  limitation the
                  obligation of Grantor to make payments  under Lender  Interest
                  Rate Agreements that are Interest Rate Agreements in the event
                  of early  termination  thereof (all such obligations under all
                  such Lender Interest Rate Agreements, being the `Interest Rate
                  Obligations'),  together with all obligations of Company under
                  the  Credit  Agreement  and  the  other  Loan  Documents,   be
                  guarantied hereunder."

                  1.8  Additional   Amendments  to  Company  Pledge   Agreement,
Holdings  Pledge  Agreement,   Subsidiary  Pledge  Agreement,  Company  Security
Agreement,  Holdings Security Agreement,  Subsidiary Security Agreement, Company
Trademark  Security  Agreement,  Subsidiary  Trademark  Security  Agreement  and
Subsidiary Guaranty.  Subsection 16 of each of the Company Pledge Agreement, the
Holdings Pledge Agreement and the Subsidiary Pledge Agreement,  subsection 20 of
the Company Security  Agreement,  subsection 21 of each of the Company Trademark
Security  Agreement,  the Holdings Security  Agreement,  the Subsidiary Security
Agreement and the Subsidiary  Trademark Security Agreement,  and subsection 3.14
of the Subsidiary  Guaranty are each hereby  amended by deleting  clause (ii) of
each such  subsection in its entirety and, in each case,  substituting  therefor
the following:


                           "(ii) after payment in full of all Obligations  under
                  the Credit  Agreement  and the other Loan  Documents,  (x) the
                  holders of a majority of the  aggregate  notional  amount (or,
                  with respect to any Lender Interest Rate Agreement which is an
                  Interest Rate Agreement that has been terminated in accordance
                  with its terms, the amount then due and payable  (exclusive of
                  expenses  and  similar   payments  but   including  any  early
                  termination payments then due) under such Lender Interest Rate
                  Agreement) under all Lender Interest Rate Agreements which are
                  Interest Rate  Agreements and (y) the holders of a majority of
                  the  aggregate  amount then due and  payable  under all Lender
                  Interest   Rate   Agreements   that  are  Daylight   Overdraft
                  Protection  Agreements  (Requisite  Lenders or, if applicable,
                  such   holders   being   referred  to  herein  as   `Requisite
                  Obligees')."
                                        5

<PAGE>





                  Section 1.9  Amendments to Exhibits.

                  Exhibits XV through  XXIII of the Credit  Agreement are hereby
amended to the extent necessary to make the provisions  therein  consistent with
the amendments made to the executed Collateral Documents and Guaranties pursuant
to Sections 1.4 through 1.8 above.


                  Section 2.                CONDITIONS TO EFFECTIVENESS

                  Section 1 of this Amendment  shall become  effective only upon
the  prior  or  concurrent  satisfaction  of  all of  the  following  conditions
precedent (the date of satisfaction of such conditions  being referred to herein
as the "First Amendment Effective Date"):

                  A. On or before the First Amendment  Effective  Date,  Company
shall deliver to Lenders (or to Administrative Agent for Lenders) the following,
each, unless otherwise noted, dated as of the First Amendment Effective Date:

                           1. Resolutions of the Board of Directors of each Loan
         Party party to this Amendment  approving and authorizing the execution,
         delivery and performance of this  Amendment,  certified as of the First
         Amendment  Effective  Date by such Loan Party's  secretary or assistant
         secretary  as being in full force and effect  without  modification  or
         amendment;

                           2. Signature and incumbency  certificates of officers
         of each Loan Party  executing  this  Amendment  certified  by such Loan
         Party's secretary or assistant secretary; and

                           3.   Counterparts  of  this  Amendment   executed  by
         Requisite Lenders and each of the other parties hereto.

                  B. On or  before  the  First  Amendment  Effective  Date,  all
corporate  and other  proceedings  taken or to be taken in  connection  with the
transactions  contemplated  hereby  and all  documents  incidental  thereto  not
previously  found  acceptable  by  Administrative  Agent,  acting  on  behalf of
Lenders,  and its  counsel  shall  be  satisfactory  in form  and  substance  to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such  counterpart  originals or certified copies of such
documents as Administrative Agent may reasonably request.
                                        6

<PAGE>




               


                  Section 3.                REPRESENTATIONS AND WARRANTIES

                  In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement,  certain of the Collateral  Documents,  the Holdings
Guaranty,  and the Subsidiary  Guaranty in the manner provided  herein,  each of
Holdings, Company and each other Loan Party party hereto represents and warrants
to each Lender that the following statements are true, correct and complete:

                  A. Corporate Power and Authority. Each Loan Party party hereto
has all requisite corporate power and authority to enter into this Amendment and
to carry out the transactions contemplated hereby and each of Holdings,  Company
and each other Loan Party party  hereto has all  requisite  corporate  power and
authority  to carry  out the  transactions  contemplated  by,  and  perform  its
obligations  under,  the Credit  Agreement  as amended  by this  Amendment  (the
"Amended  Agreement") and each Loan Party has all requisite  corporate power and
authority  to carry  out the  transactions  contemplated  by,  and  perform  its
obligations  under,  the  Collateral  Documents or the Holdings  Guaranty or the
Subsidiary  Guaranty  to  which  it is a party  as  amended  by  this  Amendment
(collectively, the "Amended Collateral Documents and Guaranties").

                  B. Authorization of Agreements.  The execution and delivery of
this  Amendment  and the  performance  of the Amended  Agreement and the Amended
Collateral  Documents and Guaranties  have been duly authorized by all necessary
corporate  action on the part of  Holdings,  Company  and each of the other Loan
Parties party hereto, as the case may be.

                  C. No Conflict.  The execution and delivery by each Loan Party
party hereto of this  Amendment and the  performance  by such Loan Party of this
Amendment and the  performance by Holdings and Company of the Amended  Agreement
and performance by Loan Parties of the applicable Amended  Collateral  Documents
and  Guaranties  do not and will not (i) violate any provision of any law or any
governmental   rule  or  regulation   applicable  to  Holdings  or  any  of  its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Holdings
or any of its  Subsidiaries  or any  order,  judgment  or decree of any court or
other agency of government binding on Holdings or any of its Subsidiaries,  (ii)
conflict with,  result in a breach of or constitute (with due notice or lapse of
time or both) a default under any  Contractual  Obligation of Holdings or any of
its  Subsidiaries,  (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its Subsidiaries
(other  than any  Liens  created  under  any of the Loan  Documents  in favor of
Administrative  Agent on behalf of  Lenders),  or (iv)  require any  approval of
stockholders  or any  approval  or consent of any Person  under any  Contractual
Obligation of Holdings or any of its Subsidiaries.

                  D. Governmental  Consents.  The execution and delivery by each
Loan Party party hereto of this Amendment and the performance by such Loan Party
of this  Amendment  and the  performance  by Holdings and Company of the Amended
Agreement and performance by Loan Parties of the applicable  Amended  Collateral
Documents and Guaranties do not and will not

                                       7

<PAGE>



require any  registration  with,  consent or approval of, or notice to, or other
action to, with or by, any  federal,  state or other  governmental  authority or
regulatory body.

                  E. Binding  Obligation.  This Amendment has been duly executed
and  delivered by each Loan Party party hereto and this  Amendment,  the Amended
Agreement and the Amended  Collateral  Documents and  Guaranties are the legally
valid and binding obligations of such Loan Party,  enforceable against such Loan
Party in accordance  with their  respective  terms,  except as may be limited by
bankruptcy, insolvency,  reorganization,  moratorium or similar laws relating to
or limiting  creditors' rights generally or by equitable  principles relating to
enforceability.

                  F. Incorporation of Representations and Warranties From Credit
Agreement.  The  representations  and  warranties  contained in Section 5 of the
Credit  Agreement  are and will be true,  correct and  complete in all  material
respects on and as of the First  Amendment  Effective Date to the same extent as
though made on and as of that date,  except to the extent  such  representations
and warranties  specifically  relate to an earlier date, in which case they were
true,  correct and complete in all  material  respects on and as of such earlier
date.

                  G. Absence of Default. No event has occurred and is continuing
or will result from the  consummation of the  transactions  contemplated by this
Amendment  that would  constitute  an Event of Default or a  Potential  Event of
Default.


                  Section 4.                ACKNOWLEDGEMENT AND CONSENT

                  Company is a party to certain  Collateral  Documents,  in each
case as amended  through the First Amendment  Effective Date,  pursuant to which
Company has created Liens in favor of Administrative Agent on certain Collateral
to secure the  Obligations.  Each of the other Loan  Parties  party  hereto is a
party to certain Collateral  Documents,  the Subsidiary Guaranty or the Holdings
Guaranty,  in each case as amended through the First  Amendment  Effective Date,
pursuant to which each such Loan Party has (i)  guarantied the  Obligations  and
(ii) created  Liens in favor of  Administrative  Agent on certain  Collateral to
secure the  obligations of such Loan Party under the Subsidiary  Guaranty or the
Holdings  Guaranty,  as the  case may be.  The Loan  Parties  party  hereto  are
collectively  referred  to  herein  as the  "Credit  Support  Parties",  and the
Collateral  Documents,  the  Subsidiary  Guaranty and the Holdings  Guaranty are
collectively referred to herein as the "Credit Support Documents".

                  Each Credit  Support  Party  hereby  acknowledges  that it has
reviewed  the terms and  provisions  of the  Credit  Agreement,  the  Collateral
Documents and Guaranties and this Amendment and consents to the amendment of the
Credit Agreement and Guaranties and the Collateral  Documents  effected pursuant
to this  Amendment.  Each Credit Support Party hereby  confirms that each Credit
Support  Document to which it is a party or otherwise  bound and all  Collateral
encumbered  thereby will continue to guaranty or secure,  as the case may be, to
the 

                                        8

<PAGE>



fullest extent  possible the payment and  performance of all  "Obligations,"
"Guarantied  Obligations" and "Secured Obligations," as the case may be (in each
case as such  terms are  defined in the  applicable  Credit  Support  Document),
including   without   limitation  the  payment  and   performance  of  all  such
"Obligations,"  "Guarantied  Obligations" or "Secured  Obligations," as the case
may be, in respect of the Obligations of Company now or hereafter existing under
or in respect of the Amended Agreement and the Notes defined therein.

                  Each Credit Support Party  acknowledges and agrees that any of
the Credit  Support  Documents to which it is a party or  otherwise  bound shall
continue  in full force and effect  and that all of its  obligations  thereunder
shall be valid and  enforceable  and shall not be  impaired  or  limited  by the
execution  or  effectiveness  of  this  Amendment.  Each  Credit  Support  Party
represents and warrants that all representations and warranties contained in the
Amended Agreement, the Amended Collateral Documents and Guaranties and the other
Credit  Support  Documents to which it is a party or  otherwise  bound are true,
correct and complete in all material  respects on and as of the First  Amendment
Effective Date to the same extent as though made on and as of that date,  except
to the extent such  representations  and  warranties  specifically  relate to an
earlier date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.

                  Each Credit  Support  Party (other than  Holdings and Company)
acknowledges and agrees that (i) notwithstanding the conditions to effectiveness
set forth in this  Amendment,  such Credit  Support Party is not required by the
terms of the  Credit  Agreement  or any other  Loan  Document  to consent to the
amendments to the Credit Agreement  effected pursuant to this Amendment and (ii)
nothing in the Credit Agreement, this Amendment or any other Loan Document shall
be deemed to require  the  consent of such  Credit  Support  Party to any future
amendments to the Credit Agreement.




                                        9

<PAGE>



                  Section 5.  MISCELLANEOUS

                  A.  Reference  to and Effect on the Credit  Agreement  and the
Other Loan Documents.

                  (i) On and after  the First  Amendment  Effective  Date,  each
         reference  in the Credit  Agreement to "this  Agreement",  "hereunder",
         "hereof",  "herein"  or words of like  import  referring  to the Credit
         Agreement,  and each  reference  in the  other  Loan  Documents  to the
         "Credit  Agreement",  "thereunder",  "thereof"  or words of like import
         referring to the Credit  Agreement shall mean and be a reference to the
         Amended  Agreement.  On and after the First  Amendment  Effective Date,
         each reference in any Collateral Document, the Holdings Guaranty or the
         Subsidiary  Guaranty  to  "this  Agreement",   "hereunder",   "hereof",
         "herein" or words of like import referring to such Collateral Document,
         the Holdings Guaranty or the Subsidiary Guaranty, and each reference in
         the  other  Loan  Documents  to  such  "Pledge  Agreement",   "Security
         Agreement", "Guaranty", "thereunder", "thereof" or words of like import
         referring to such Collateral Document,  Holdings Guaranty or Subsidiary
         Guaranty  shall mean and be a reference  to such  Collateral  Document,
         Holdings Guaranty or Subsidiary Guaranty, as applicable,  as amended by
         this Amendment.

                  (ii) Except as  specifically  amended by this  Amendment,  the
         Credit  Agreement  and the other Loan  Documents  shall  remain in full
         force and effect and are hereby ratified and confirmed.

                  (iii)  The  execution,   delivery  and   performance  of  this
         Amendment shall not, except as expressly provided herein,  constitute a
         waiver of any provision of, or operate as a waiver of any right,  power
         or remedy of Agent or any Lender under,  the Credit Agreement or any of
         the other Loan Documents.

                  B. Fees and Expenses. Company acknowledges that all reasonable
costs, fees and expenses as described in subsection 11.2 of the Credit Agreement
incurred by Administrative  Agent and its counsel with respect to this Amendment
and the documents and transactions  contemplated hereby shall be for the account
of Company.

                  C. Headings. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

                  D.       Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  GOVERNED  BY,  AND  SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE


                                       10

<PAGE>



STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

                  E. Counterparts; Effectiveness. This Amendment may be executed
in any  number of  counterparts  and by  different  parties  hereto in  separate
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  but all such  counterparts  together shall constitute but one and the
same  instrument;  signature  pages  may  be  detached  from  multiple  separate
counterparts  and attached to a single  counterpart so that all signature  pages
are  physically  attached to the same document.  This Amendment  (other than the
provisions of Section 1, which shall become  effective upon the  satisfaction of
each of the conditions  set forth in Section 2) shall become  effective upon the
execution of a counterpart hereof by all Requisite Lenders and each of the other
parties  hereto and  receipt by Company and  Administrative  Agent of written or
telephonic notification of such execution and authorization of delivery thereof.






                                       11

<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Amendment  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

                                                FRD ACQUISITION CO.


                                                By:
                                                Title:


                                                FRI-M CORPORATION


                                                By:
                                                Title:


                                                FRI-FRD CORPORATION


                                                By:
                                                Title:


                                                CFC FRANCHISING COMPANY


                                                By:
                                                Title:


                                                FRI-J CORPORATION


                                                By:
                                                Title:


                                                JOJOS RESTAURANTS, INC.


                                                By:
                                                Title:



                                       S-12

<PAGE>




                                            JOJOS CALIFORNIA FAMILY RESTAURANTS,
                                                INC.


                                                By:
                                                Title:


                                                COCO'S RESTAURANTS, INC.


                                                By:
                                                Title:


                                                FRI-C CORPORATION


                                                By:
                                                Title:


                                                CARROWS RESTAURANTS, INC.


                                                By:
                                                Title:


                                                CARROWS CALIFORNIA FAMILY
                                                RESTAURANTS, INC.


                                                By:
                                                Title:



                                                FRI-DHD CORPORATION


                                                By:
                                                Title:



                                                 FAR WEST CONCEPTS, INC.


                                                 By:
                                                 Title:



                                       S-13

<PAGE>



                                FRI-NA CORPORATION


                                By:
                                Title:


LENDERS:                        CREDIT LYONNAIS NEW YORK BRANCH,
                                individually and as Administrative Agent


                                By:
                                Title:


                                BANKERS TRUST COMPANY,
                                individually and as
                                Co-Syndication Agent


                                By:
                                Title:


                                CHEMICAL BANK, individually and
                                as Co-Syndication Agent


                                By:
                                Title:


                                CITICORP USA, INC., individually and
                                as Co-Syndication Agent


                                By:
                                Title:



                                       S-14

<PAGE>







