Document:

<PAGE>

                                                                    EXHIBIT 10.1

        AMENDMENT NO. 6 TO AMENDED AND RESTATED REDUCING REVOLVING LOAN
                              AGREEMENT AND WAIVER

     This Amendment No. 6 to Amended and Restated Reducing Revolving Loan
Agreement and Waiver (this "Amendment") is entered into with reference to the
Amended and Reducing Revolving Loan Agreement dated as of October 14, 1998 among
Pinnacle Entertainment, Inc. (acting under its former name, Hollywood Park, Inc.
and referred to herein as "Borrower"), the Banks and Co-Agents referred to
therein, and Bank of America, N.A., as Administrative Agent (as heretofore
amended, the "Loan Agreement"). Capitalized terms used but not defined herein
are used with the meanings set forth for those terms and in the Loan Agreement.

     Borrower and the Administrative Agent, acting with the consent of the
Requisite Banks pursuant to Section 11.2 of the Loan Agreement, agree as
follows:

     1.  Additional and Amended Definitions: Section 1.1 of the Loan Agreement
         ----------------------------------
is hereby amended to add the following defined terms thereto:

     "Average Net Available Cash" means, as of the last date of each Fiscal
      --------------------------
     Quarter, the average daily amount of the Net Available Cash for the Fiscal
     Quarter ending on that date.

     "Net Available Cash" means, as of each date of determination, (a) the
      ------------------
     balance of the consolidated Cash and Cash Equivalents of Borrower and its
     Restricted Subsidiaries as of that date, minus cage cash maintained at
                                              -----
     their respective properties in an aggregate amount not to exceed
     $45,000,000.

and to amend the following defined term to read in full as follows:

     "Net Funded Debt Ratio" means, as of each date of determination, the ratio
      ---------------------
     which results from subtracting the Average Net Available Cash from the
     numerator of the Funded Debt Ratio as of that date.

     2.  Voluntary Reduction of the Commitment.  Concurrently with the
         -------------------------------------
execution of this Amendment, Borrower hereby reduces the Commitment from
$170,000,000 to $110,000,000 in accordance with the provisions of Section 2.5 of
the Loan Agreement, and the Banks hereby waive the three Business Day notice
period contemplated by that Section in connection with such reduction.

      3.  New Section 2.14 Condition for Loans and Letters of Credit.  The Loan
          ----------------------------------------------------------
Agreement is hereby amended to add a new Section 2.14 to read in full as
follows:

     "2.14 Condition for Loans and Letters of Credit. Notwithstanding anything
           -----------------------------------------
     to the contrary contained in this Agreement, following November 7, 2001,
     the Borrower shall have no right to request an Advance or the issuance of
     a Letter of Credit and no Advance will be made or Letter of Credit issued
     unless, as of the date of such request, (a) Net Available Cash is zero or
     less than zero, (b) Borrower has received all required governmental
     consents to, and shall have executed and delivered to the Administrative

                                      -1-
<PAGE>

     Agent in form and substance acceptable to the Administrative Agent,
     Collateral Documents granting a Lien in substantially all of its real and
     personal Property, wherever located, subject only to Permitted Liens, and
     (c) Borrower has delivered to the Administrative Agent, the final executed
     prime construction contract for the proposed Lake Charles Louisiana
     Project demonstrating a guaranteed maximum price for those portions of
     such project customarily covered by prime construction contracts."

     4.  Suspension of Share Repurchase Basket.  Borrower hereby agrees that,
         -------------------------------------
notwithstanding any other provision of the Loan Documents to the contrary, it
shall not make or declare any Distribution consisting of the retirement,
repurchase, redemption or other acquisition of its equity securities during the
period between the effective date of this Amendment and April 1, 2002.

     5.  Capital Expenditures - Section 6.14.  Section 6.14 of the Loan
         -----------------------------------
Agreement is amended to add the following sentence at the end thereof:

     "Notwithstanding any other provision of this Section, during the Restricted
     Period Borrower shall not, and shall not permit any of the Restricted
     Subsidiaries to, make any Capital Expenditure other than (i) Maintenance
     Capital Expenditures, and (ii) Capital Expenditures made following
     September 30, 2001 with respect to (A) Boomtown Reno in an aggregate amount
     not to exceed $1,000,000, (B) Boomtown New Orleans in an aggregate amount
     not to exceed $2,800,000, (C) Casino Magic Bossier City, in an aggregate
     amount not to exceed $25,000,000, (D) a player tracking system for Borrower
     and its Subsidiaries in an aggregate amount not to exceed $4,500,000, and
     (E) the Lake Charles, Louisiana project, in an aggregate amount not to
     exceed $225,000,000."

     6.  Amendment to Interest Coverage Ratio - Section 6.11.  Section 6.11 of
         ---------------------------------------------------
the Loan Agreement is hereby amended so that the following are the required
ratios as of the dates set forth below (with the ratios amended hereby shown in
bold text for the convenience of the reader):

         Fiscal Quarter or Period        Minimum Interest Coverage Ratio
         ------------------------        -------------------------------

         September 30, 200l              1.10:1.00

         December 31, 200l through       1.05:l.00
         March 31, 2002

         June 30,2002 through
         December 31, 2002               1.25:1.00

         March 31,2003 and
         June 30, 2003                   1.50:1.00

         Thereafter                      2.00:1.00

     7.  Amendment to Net Funded Debt Ratio - Section 6.13.  Section 6.13 of the
         --------------------------------------------------
Loan Agreement is hereby amended so that the following are the required ratios
as of the dates set forth below (with the ratios amended hereby shown in bold
text for the convenience of the reader):

                                      -2-
<PAGE>

         Fiscal Quarter or Period        Maximum Net Funded Debt Ratio
         ------------------------        -----------------------------

         September 30, 2001              5:45:1.00

         December 31, 2001               6:50:1.00

         March 31, 2002                  6:85:1.00

         June 30, 2002 through
         June 30, 2003                   5.35:1.00

         Thereafter                      4.50:1.00

     8.  New Subsection 8.3(e).  Section 8.3 of the Loan Agreement is amended to
         ---------------------
add a subsection (e) to read as follows:

         "(e) The Administrative Agent shall have received a Request for Loan or
     Request for Letter of Credit certifying that Net Available Cash, as of the
     date of the Request for Loan or the Request for Letter of Credit, is zero
     or less than zero."

In connection with the amendment described in this Section, Exhibits K and L to
the Loan Agreement, being the forms of the Request for Loan and Request for
Letter of Credit, are hereby amended to be in the forms attached as Exhibits K
and L to this Amendment.

     9.  Waiver of Net Funded Debt Ratio as of September 30, 2001.  Compliance
         --------------------------------------------------------
with Section 6.13 of the Loan Agreement is hereby waived in respect of the
Fiscal Quarter ended September 30, 200l.

     10. Waiver of Interest Coverage Ratio as of September 30, 2001.  Compliance
         ----------------------------------------------------------
with Section 6.11 of the Loan Agreement is hereby waived in respect of the
Fiscal Quarter ended September 30, 2001.

     11.  Representations and Warranties. Borrower represents and warrants that
          ------------------------------
as of the date hereof and giving effect to this Amendment, no Default or Event
of Default exists.

     12.  No Other Waivers.  The waivers contained in Section 9 and Section 10
          ----------------
of this Amendment are expressly limited to the facts and circumstances referred
to therein and shall not operate as a waiver of or a consent to non-compliance
with any other section of the Loan Agreement or any of the other Loan Documents.
The waivers contained in Section 9 and Section 10 are only effective for the
specific instances, for the specific purposes and for the specific period for
which given. It is acknowledged that in order to comply with Sections 6.11 and
6.13 (as amended and to the extent waived hereby following March 31, 2002),
Borrower shall need to improve operating performance or take other operational
measures which are not currently determined, and which have not been
incorporated into and are not a part of Borrower's current projections of its
operating performance.

                                      -3-
<PAGE>

     13.  Conditions Precedent.  The effectiveness of this Amendment is
          --------------------
conditioned upon the receipt by the Administrative Agent of the following, each
properly executed by a Responsible Official of each party thereto and dated as
of the date hereof:

          (a)  Counterparts of this Amendment executed by all parties hereto;

          (b)  Written consent of the Requisite Banks as required under Section
               11.2 of the Loan Agreement in the form of Exhibit A to this
               Amendment;

          (c)  Written consent of the Subsidiary Guarantors in the form of
               Exhibit B to this Amendment; and

          (d)  A fee, for the account of each Bank which has approved this
               Amendment on or prior to 3:00 p.m. (California local time),
               November 7, 2001, in an amount equal to 20 basis points times its
               Pro Rata Share of the Commitment (as reduced hereby).

     14.  Confirmation. In all respects, the terms of the Loan Agreement (as
          ------------
amended hereby) are hereby confirmed.

[Remainder of this page intentionally left blank - Signature Pages to follow]

                                      -4-
<PAGE>

     IN WITNESS WHEREOF, Borrower and the Administrative Agent have executed
this Amendment as of November 7, 2001 by their duly authorized representatives.

                                       PINNACLE ENTERTAINMENT, INC.

                                       By:  /s/ BRUCE C. HINKLEY
                                           -----------------------------
                                           Bruce C. Hinkley,
                                           Chief Financial Officer

                                       BANK OF AMERICA, N.A.
                                       as Administrative Agent

                                       By:  /s/ JANICE HAMMOND
                                           ------------------------------
                                           Janice Hammond, Vice President

                                      -5-
<PAGE>

                                   Exhibit A

      To Amendment No. 6 to Amended and Restated Reducing Revolving Loan
                             Agreement and Waiver

                                CONSENT OF BANK

     Reference is hereby made to the Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998 (as heretofore amended, the "Loan
Agreement") among Pinnacle Entertainment, Inc. (then known as "Hollywood Park,
Inc." and herein, "Borrower"), the Banks party thereto, Societe Generale and
Bank of Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and Bank of America, N.A. (then known as "Bank of America National Trust
and Savings Association"), as Administrative Agent.

     The undersigned Bank hereby consents to the execution and delivery of
Amendment No. 6 to Amended and Restated Reducing Loan Agreement and Waiver by
the Administrative Agent on its behalf, substantially in the form of the most
recent draft thereof presented to the undersigned Bank.

Dated as of November 7, 2001.

                                       ----------------------------
                                       [Name of Bank]

                                       By:
                                           ---------------------------
                                       Title:

                                      -6-
<PAGE>

                                   Exhibit B

      To Amendment No. 6 to Amended and Restated Reducing Revolving Loan
                             Agreement and Waiver

                        CONSENT OF SUBSIDIARY GUARANTORS

     Reference is hereby made to the Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998 (as heretofore amended, the "Loan
Agreement") among Pinnacle Entertainment, Inc. (then known as "Hollywood Park,
Inc." and herein, "Borrower"), the Banks party thereto, Societe Generale and
Bank of Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and Bank of America, N.A. (then known as "Bank of America National Trust
and Savings Association"), as Administrative Agent.

     Each of the undersigned Subsidiary Guarantors hereby consent to Amendment
No. 6 to Amended and Restated Reducing Revolving Loan Agreement and Waiver in
the form executed by Borrower and confirms that the Subsidiary Guaranty
(General) and the Subsidiary Guaranty (Crystal Park), as applicable, and all
Collateral Documents to which it is a party remain in full force and effect.

HP YAKAMA, INC.
HP/COMPTON, INC.
BOOMTOWN, INC.
CRYSTAL PARK HOTEL AND CASINO DEVELOPMENT COMPANY LLC
   By: HP/COMPTON, INC., its manager
BOOMTOWN HOTEL & CASINO, INC.
LOUISIANA-1 GAMING, L.P., a Louisiana partnership in commendant,
   By: LOUISIANA GAMING ENTERPRISES, INC., its general partner
LOUISIANA GAMING ENTERPRISES, INC.
BELTERRA RESORT INDIANA, LLC (formerly known as Indiana Ventures LLC).
   By: PINNACLE ENTERTAINMENT, INC., as managing member
CASINO MAGIC CORP.
BILOXI CASINO CORP.
CASINO ONE CORPORATION
JEFFERSON CASINO CORPORATION
CASINO MAGIC OF LOUISIANA CORP.
CASINO MAGIC MANAGEMENT SERVICES CORP.

By:
    ----------------------------------------
    Bruce C. Hinckley, Authorized Signatory
    for each of the foregoing

                                      -7-<PAGE>

                                                                   EXHIBIT 10(d)
                         Foothill Capital Corporation
                     2450 Colorado Avenue, Suite 3000 West
                        Santa Monica, California 90404

                            As of October 18, 2001

FRI-MRD CORPORATION
Attn: Mr. Robert D. Gonda
18831 Von Karman Avenue
Irvine, California 92612

               Re:  Foothill Capital Corporation; Chi-Chi's, Inc., as Borrower,
                    FRI-MRD Corporation, as a Guarantor, Prandium, Inc., as a
                    Guarantor, and each of their Subsidiaries, as Guarantors
                    --------------------------------------------------------

Ladies and Gentlemen:

          Reference hereby is made to that certain Amended and Restated Loan and
Security Agreement, dated as of July 19, 2000 (as amended, restated,
supplemented, or otherwise modified from time to time, the "Loan Agreement"), by
                                                            --------------
and among, on the one hand, FRI-MRD CORPORATION, a Delaware corporation ("FRI-
                                                                          ---
MRD"), CHI-CHI'S, INC., a Delaware corporation ("Borrower"), and for purposes of
---                                              --------
acknowledging and agreeing to Section 15.11 of the Loan Agreement, by PRANDIUM,
                              -------------
INC., a Delaware corporation, formerly known as Family Restaurants, Inc.

("Prandium"), and each of its Affiliates that are signatories thereto, and, on
 ---------
the other hand, FOOTHILL CAPITAL CORPORATION, a California corporation

("Foothill").  Capitalized terms used but not otherwise defined herein shall
 ---------
have the meanings ascribed to them in the Loan Agreement.

          Borrower, Prandium, FRI-MRD, and each of their undersigned Affiliates
each acknowledge and agree that unwaived Events of Default have occurred.  The
Events of Default currently known by Foothill include the following Events of
Default (the "Present Events of Default"):
              -------------------------

          A.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(a) of the Loan Agreement, the actual EBITDA of the Borrower for the period
-------
of four consecutive fiscal quarters ending December 31, 2000 was $557,000, which
fails to satisfy the required minimum EBITDA for the Borrower of $4,500,000 for
such period;

          B.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(a) of the Loan Agreement, the actual EBITDA of the Borrower for the period
-------
of four consecutive fiscal quarters ending April 1, 2001 was ($1,500,000), which
fails to satisfy the required minimum EBITDA for the Borrower of $4,500,000 for
such period;

          C.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(a) of the Loan Agreement, the actual EBITDA of the Borrower for the period
-------
of four consecutive fiscal quarters ending July 1, 2001 was ($1,551,000), which
fails to satisfy the required minimum EBITDA for the Borrower of $4,500,000 for
such period;
<PAGE>

          D.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(b) of the Loan Agreement, the actual EBITDA of the Borrower, HGI, KKR and
-------
FRI-Admin, on a combined basis for the period of four consecutive fiscal
quarters ending December 31, 2000 was $1,970,000, which fails to satisfy the
required minimum EBITDA for the Borrower, HGI, KKR and FRI-Admin, on a combined
basis, of $6,000,000 for such period;

          E.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(b) of the Loan Agreement, the actual EBITDA of the Borrower, HGI, KKR and
-------
FRI-Admin, on a combined basis for the period of four consecutive fiscal
quarters ending April 1, 2001 was ($1,825,000), which fails to satisfy the
required minimum EBITDA for the Borrower, HGI, KKR and FRI-Admin, on a combined
basis, of $6,000,000 for such period;

          F.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(b) of the Loan Agreement, the actual EBITDA of the Borrower, HGI, KKR and
-------
FRI-Admin, on a combined basis for the period of four consecutive fiscal
quarters ending July 1, 2001 was ($3,665,000), which fails to satisfy the
required minimum EBITDA for the Borrower, HGI, KKR and FRI-Admin, on a combined
basis, of $6,000,000 for such period;

          G.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(c) of the Loan Agreement, the actual EBITDA of KKR for the period of four
-------
consecutive fiscal quarters ending December 31, 2000 was ($675,000), which fails
to satisfy the required minimum EBITDA for KKR of $0 for such period;

          H.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(c) of the Loan Agreement, the actual EBITDA of KKR for the period of four
-------
consecutive fiscal quarters ending April 1, 2001 was ($1,162,000), which fails
to satisfy the required minimum EBITDA for KKR of $500,000 for such period;

          I.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(c) of the Loan Agreement, the actual EBITDA of KKR for the period of four
-------
consecutive fiscal quarters ending July 1, 2001 was ($1,818,000), which fails to
satisfy the required minimum EBITDA for KKR of $500,000 for such period;

          J.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(d) of the Loan Agreement, the actual EBITDA of KKR and HGI on a combined
-------
basis for the period of four consecutive fiscal quarters ending April 1, 2001
was $2,559,000, which fails to satisfy the required minimum EBITDA for KKR and
HGI on a combined basis of $3,000,000 for such period;

          K.  In violation of the financial covenant contained in Section
                                                                  -------
7.20(d) of the Loan Agreement, the actual EBITDA of KKR and HGI on a combined
-------
basis for the period of four consecutive fiscal quarters ending July 1, 2001 was
$1,824,000, which fails to satisfy the required minimum EBITDA for KKR and HGI
on a combined basis of $3,000,000 for such period;

          L.  FRI-MRD is in default with respect to its payment obligations
under the Senior Discount Notes and the Senior Secured Discount Notes, which
constitutes an Event of Default pursuant to Section 8.10 of the Loan Agreement.
                                            ------------

                                       2
<PAGE>

          Borrower, Prandium, FRI-MRD, and each of their undersigned Affiliates
each acknowledge and agree that, as a result of the Present Events of Default,
among other things, Foothill's obligation to make Advances, issue Letters of
Credit or otherwise extend credit to Borrower under the Loan Agreement has been
terminated.

          To provide FRI-MRD with additional time to negotiate a restructuring
of its Indebtedness under the Senior Secured Discount Notes and the Senior
Discount Notes, among other Indebtedness, Foothill agrees to forbear from
exercising its remedies relative to the Present Events of Default during the
Forbearance Period (as hereinafter defined), subject to satisfaction of the
following conditions precedent: (a) Foothill shall have received a fully
executed counterpart of this agreement, (b) Foothill shall have received a
reaffirmation and consent, in the form of Exhibit A hereto, which shall be duly
executed by each Guarantor, dated as of the date hereof, and in full force and
effect, and (c) Foothill shall have received a forbearance fee, in full in cash,
in the amount of $50,000, which forbearance fee shall be fully earned and non-
refundable as of the date hereof.  The foregoing to the contrary
notwithstanding, Foothill shall have no obligation to forbear from satisfying
any Obligations which may be outstanding as of any date of determination from
any cash or Cash Equivalents held by or on behalf of Foothill or its Affiliates
to secure the Obligations.

          FRI-MRD, Prandium, Borrower and each of their undersigned Affiliates
each covenants and agrees as follows:

          1.  FRI-MRD, Prandium, Borrower and each such undersigned Affiliate
(collectively, the "Releasing Parties") each hereby releases and discharges
                    -----------------
absolutely and forever, Foothill, Foothill's predecessors, assigns and their
respective officers, directors, shareholders, partners, agents, employees,
servants, related corporations, subsidiaries, affiliates, partnerships, or other
entities related thereto, whether controlled by or related to Foothill and their
attorneys (collectively, the "Released Parties") of and from any and all claims,
                              ----------------
rights, demands, injuries, debts, damages, liabilities, omissions, accounts,
contracts, agreements, promissory notes, obligations, causes of action, costs,
expenses, liens, things, matters, and defenses, whether known or unknown,
suspected or unsuspected, of every kind and nature which now exist, and/or
heretofore have existed in the favor of the Releasing Parties against the
Released Parties arising or in any way connected with the financial relationship
between the parties arising from the underlying Loan Documents and documents
related thereto.

          Each of the Releasing Parties acknowledges that Section 1542 of the
Civil Code of California provides:

          "A general release does not extend to claims which the creditor does
not know or suspect to exist in his-favor at the time of executing a release,
which "if known by him must have materially affected his settlement with the
debtor."

          Each of the Releasing Parties have been advised by counsel with
respect to the release contained herein. Each such Releasing Party also
acknowledges that it may hereafter discover facts in addition to or different
from those which each such party know or believe to be true with respect to the
subject matter of the release given hereby, but that it is the intention of each
such Releasing Party to, and each such Releasing Party does hereby, fully,
finally and

                                       3
<PAGE>

forever waive any and all rights and defenses as set forth hereinabove. Upon
advice of such counsel, and in furtherance of such intention, each Releasing
Party waives all rights granted to each such Releasing Party by Section 1542 of
the Civil Code of California and acknowledges that the release herein given
shall be and remain in effect as a full and complete general release as to the
matters released herein, notwithstanding the subsequent discovery or existence
of any such additional or different facts.

          2.  FRI-MRD, Prandium, Borrower, and each such undersigned Affiliate
each agrees that Foothill and its Affiliates may continue to hold any cash or
Cash Equivalents which were previously provided to Foothill as additional
security for the Obligations until such time as (a) all Obligations have been
satisfied in full in cash, and (b) (i) Foothill has received an irrevocable
letter of credit from a financial institution acceptable to Foothill in its
discretion, in form and substance acceptable to Foothill in its discretion, in
favor of Foothill in an amount equal to 105% of the maximum amount of Foothill's
obligations under all outstanding Letters of Credit, or (ii) all Letters of
Credit have expired or have been released.

          3.  FRI-MRD, Prandium, Borrower, and each such undersigned Affiliate
each waives any right to seek authority from the bankruptcy court in which an
Insolvency Proceeding is pending to obtain the use of any cash or Cash
Equivalents held by or on behalf of Foothill or its Affiliates to secure the
Obligations.  In addition, FRI-MRD, Prandium, Borrower and each of their
undersigned Affiliates each covenants and agrees that such Person shall not seek
authority of such bankruptcy court to use such cash or Cash Equivalents.  Such
cash collateral will bear interest at the per annum rate applicable from time to
time with respect to ninety (90) day certificates of deposit offered by Wells
Fargo Bank, National Association, a national banking association.  If at any
time the aggregate amount of such collateral exceeds 105% of the maximum amount
of Foothill's obligations under outstanding Letters of Credit by more than
$50,000, Foothill shall promptly (and in any event within five (5) Business Days
of Foothill's receipt of a written notice from Borrower of the existence of such
excess) pay such excess to Borrower, to the extent that such excess is greater
than $50,000; provided, however, that if at any time the maximum amount of
              --------  -------
Foothill's obligations under outstanding Letters of Credit does not exceed
$6,000,000, Foothill shall only be required to return a portion of such
collateral to Borrower to the extent that the aggregate amount of such
collateral exceeds 105% of the maximum amount of Foothill's obligations under
outstanding Letters of Credit by more than $250,000.  Foothill also agrees to
pay to Borrower, on the last Business Day of each month, all accrued and unpaid
interest on such collateral during such month pursuant to the first sentence of
this paragraph.

          4.  On or before the earlier to occur of (a) October 18, 2001, and (b)
the date when an Insolvency Proceeding is commenced with respect to FRI-MRD,
Prandium, Borrower or any of their Affiliates, FRI-MRD, Prandium, Borrower and
such Affiliates shall cause the releases of the mortgages and deeds of trust
previously executed and delivered in favor of Foothill with respect to the Real
Property Collateral, which releases were executed by Foothill prior to the date
hereof, to be recorded in each jurisdiction where the Real Property Collateral
is located.

          5.  Before the date when an Insolvency Proceeding is commenced with
respect to FRI-MRD, Prandium, Borrower or any of their Affiliates, Foothill
shall have received

                                       4
<PAGE>

a copy of a commitment letter, which shall provide for, among other things, (a)
the delivery to Foothill of an irrevocable letter of credit from a financial
institution acceptable to Foothill in its discretion, in form and substance
acceptable to Foothill in its discretion, in favor of Foothill in an amount
equal to 105% of the maximum amount of Foothill's obligations under all
outstanding Letters of Credit, or (b) the issuance of replacement letters of
credit in connection with the release of all existing Letters of Credit.

          FRI-MRD, Prandium, Borrower, each of their undersigned Affiliates and
Foothill each agree that Section 2.6(c) of the Loan Agreement is hereby amended
                         --------------
and restated in its entirety as follows:

          "(c)  Letter of Credit Fees.  On the first day of each month, Borrower
                ---------------------
will pay Foothill a fee (in addition to the charges, commissions, fees, and
costs set forth in Section 2.2(d)) equal to 5.0% per annum times the actual
                   --------------
Daily Balance of the undrawn Letters of Credit that were outstanding during the
immediately preceding month (it being understood that Borrower will not be
charged default interest based on the Present Events of Default or an Event of
Default which occurs as a result of any failure by Borrower, any Guarantor or
any of their Affiliates to comply with the requirements set forth in Sections
                                                                     --------
7.20 or 7.21 of the Loan Agreement)."
----    ----

          As used herein, Forbearance Period shall mean the period commencing on
the date when the above referenced conditions precedent have been satisfied and
continuing through the earliest to occur of: (i) January 10, 2002 (or such later
date as Foothill may designate in writing in its sole discretion); (ii) the
occurrence of any Event of Default other than a Present Event of Default or an
Event of Default which occurs as a result of any failure by Borrower, any
Guarantor or any of their Affiliates to comply with the requirements set forth
in Sections 7.20 or 7.21 of the Loan Agreement; or (iii) the first date when
   -------- ----    ----
FRI-MRD, Prandium, Borrower, or any of their undersigned Affiliates have failed
to comply with any of the covenants set forth above in paragraphs 3, 4, 5 and 6.

          The forbearance referenced herein is limited to the specifics hereof,
shall not apply with respect to any facts or occurrences other than those on
which the same are based, shall not excuse future non-compliance with the Loan
Agreement (as it may from time to time be amended), and, except as expressly set
forth herein, shall not operate as a waiver or an amendment of any right, power
or remedy of Foothill, nor as a consent to any further or other matter, under
the Loan Documents.

          This letter agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument and any
of the parties hereto may execute this letter agreement by signing any such
counterpart.  Delivery of an executed counterpart of this letter agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this letter agreement.  Any party delivering an executed
counterpart of this letter agreement by telefacsimile also shall deliver an
original executed counterpart of this letter agreement but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this letter agreement.

          This letter agreement is a Loan Document.

                                       5
<PAGE>

          Please indicate your agreement with the foregoing by signing this
letter agreement in the space provided for your signature below and returning it
to the undersigned.

                                    FOOTHILL CAPITAL CORPORATION

                                    By     /s/ Teresa M. Bolick
                                          --------------------
                                    Title   Vice President

     Acknowledged and Agreed:

     FRI-MRD CORPORATION,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title President

     CHI-CHI'S, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     PRANDIUM, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title EVP/CFO

     FRI-ADMIN CORPORATION,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title President

<PAGE>

     CCMR OF TIMONIUM, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF MARYLAND, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF CATONSVILLE, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF GREENBELT, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF RITCHIE HIGHWAY, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

<PAGE>

     CCMR OF CUMBERLAND, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF HARFORD COUNTY, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     MAINTENANCE SUPPORT GROUP, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF FREDERICK, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF INNER HARBOR, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

<PAGE>

     CHI-CHI'S OF WEST VIRGINIA, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     KOO KOO ROO, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     THE HAMLET GROUP, INC.,
     a California corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     cc:  David Reamer, Esq.
          John Francis Hilson, Esq.

<PAGE>

                                   EXHIBIT A
                                   ---------

                           Reaffirmation and Consent

     Reference hereby is made to (a) that certain Amended and Restated Loan and
Security Agreement, dated as of July 19, 2000 (as amended, restated,
supplemented, or otherwise modified from time to time, the "Loan Agreement"), by
                                                            --------------
and among, on the one hand, FRI-MRD CORPORATION, a Delaware corporation ("FRI-
                                                                          ---
MRD"), CHI-CHI'S, INC., a Delaware corporation ("Borrower"), and for purposes of
---                                              --------
acknowledging and agreeing to Section 15.11 of the Loan Agreement, by PRANDIUM,
                              -------------
INC., a Delaware corporation, formerly known as Family Restaurants, Inc.

("Prandium"), and each of its Affiliates that are signatories thereto, and, on
 ---------
the other hand, FOOTHILL CAPITAL CORPORATION, a California corporation

("Foothill"); and (b) that certain letter agreement dated as of October __, 2001
 ---------
(the "Letter Agreement"), by and among, on the one hand, FRI-MRD, Borrower,
Prandium and each of its Affiliates that are signatories thereto, and on the
other hand, Foothill.  Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.

     Each of the undersigned hereby (a) represents and warrants to Foothill that
the execution, delivery, and performance of this Reaffirmation and Consent are
within its corporate powers, have been duly authorized by all necessary
corporate action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or governmental authority, or of the terms of its charter or bylaws, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected; (b) consents to the amendment of the Loan
Agreement by the Letter Agreement; (c) acknowledges and reaffirms its
obligations owing to Foothill under the Guaranty and any other Loan Documents to
which it is party; and (d) agrees that each of the Guaranty and any other Loan
Documents to which it is a party is and shall remain in full force and effect.
Although each of the undersigned has been informed of the matters set forth
herein and has acknowledged and agreed to same, it understands that Foothill has
no obligation to inform it of such matters in the future or to seek its
acknowledgement or agreement to future amendments, and nothing herein shall
create such a duty.  This Reaffirmation and Consent may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Reaffirmation and Consent.  Delivery of an executed counterpart of this
Reaffirmation and Consent by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Reaffirmation and Consent.
Any party delivering an executed counterpart of this Reaffirmation and Consent
by telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent.

<PAGE>

     This Reaffirmation and Consent shall be governed by internal laws of the
State of California as more fully set forth in Section 13 of the Loan Agreement.

     FRI-MRD CORPORATION,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title President

     PRANDIUM, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title EVP/CFO

     FRI-ADMIN CORPORATION,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title President

     CCMR OF TIMONIUM, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF MARYLAND, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

<PAGE>

     CCMR OF CATONSVILLE, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF GREENBELT, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF RITCHIE HIGHWAY, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF CUMBERLAND, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF HARFORD COUNTY, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

<PAGE>

     MAINTENANCE SUPPORT GROUP, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF FREDERICK, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CCMR OF INNER HARBOR, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     CHI-CHI'S OF WEST VIRGINIA, INC.,
     a Kentucky corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

     KOO KOO ROO, INC.,
     a Delaware corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

<PAGE>

     THE HAMLET GROUP, INC.,
     a California corporation

     By   /s/ R. T. Trebing, Jr.
         -----------------------
     Title Vice President

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