<PAGE>

                                                                  Exhibit 10(ee)

                          Foothill Capital Corporation
                      2450 Colorado Avenue, Suite 3000 West
                         Santa Monica, California 90404

                              As of March 13,2002

FRI-MRD CORPORATION
Attn: Mr. Robert T. Trebing, Jr.
2701 Alton Parkway
Irvine, California 92606

               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.

          Reference is further hereby made to that certain letter agreement,
dated as of March 29, 2001, by and among Foothill, Borrower, Prandium, FRI-MRD,
and each of the Affiliates signatory thereto, wherein Borrower, Prandium,
FRI-MRD, and each of the Affiliates signatory thereto acknowledged and agreed,
among other things, that certain unwaived Events of Default have occurred and
are continuing (the "March 2001 Events of Default").
                     ----------------------------

          Reference is further hereby made to that certain letter agreement,
dated as of May 15, 2001, by and among Foothill, Borrower, Prandium, FRI-MRD,
and each of the Affiliates signatory thereto, wherein Borrower, Prandium,
FRI-MRD, and each of the Affiliates signatory thereto acknowledged and agreed,
among other things, that certain unwaived Events of Default have occurred and
are continuing (the "May 2001 Events of Default").
                     --------------------------

          Reference is further hereby made to that certain letter agreement,
dated as of October 18, 2001, by and among Foothill, Borrower, Prandium,
FRI-MRD, and each of the Affiliates signatory thereto, wherein Borrower,
Prandium, FRI-MRD, and each of the Affiliates signatory thereto acknowledged and
agreed, among other things, that certain unwaived Events of Default have
occurred and are continuing (the "October 2001 Events of Default").
                                  ------------------------------

<PAGE>


          Reference is further hereby made to that certain letter agreement,
dated as of January 10, 2002, by and among Foothill, Borrower, Prandium,
FRI-MRD, and each of the Affiliates signatory thereto, wherein Borrower,
Prandium, FRI-MRD, and each of the Affiliates signatory thereto acknowledged and
agreed, among other things, that certain unwaived Events of Default have
occurred and are continuing (the "January 2002 Events of Default").
                                  ------------------------------

          Borrower, Prandium, FRI-MRD, and each of the Affiliates signatory
thereto acknowledge and agree that the March 2001 Events of Default, the May
2001 Events of Default, the October 2001 Events of Default, the January 2002
Events of Default, and the following Events of Default (the "March 2002 Events
                                                             -----------------
of Default") have occurred and are continuing (the March 2001 Events of Default,
----------
the May 2001 Events of Default, the October 2001 Events of Default, the January
2002 Events of Default, and the March 2002 Events of Default are herein
collectively referred to as the "Present Events of Default"):
                                 -------------------------

          A. In violation of Paragraph 3 of that certain letter agreement, dated
                             -----------
as of January 10, 2002, FRI-MRD and Prandium failed to each commence a voluntary
pre-negotiated or prepackaged Insolvency Proceeding under Chapter 11 of the
United States Bankruptcy Code on or before March 1, 2002.

          B. In violation of Section 7.20(b) of the Loan Agreement, FRI-MRD and
                             ---------------
its Subsidiaries failed to maintain, in the case of Borrower, HGI, KKR and
FRI-Admin, on a combined basis, EBITDA of at least $6,000,000 for the 4
consecutive fiscal quarters ended December 30, 2001.

          C. In violation of Section 7.20(c) of the Loan Agreement, FRI-MRD and
                             ---------------
its Subsidiaries failed to maintain, in the case of KKR, EBITDA of at least
$500,000 for the 4 consecutive fiscal quarters ended December 30, 2001.

          D. In violation of Section 7.20(d) of the Loan Agreement, FRI-MRD and
                             ---------------
its Subsidiaries failed to maintain, in the case of KKR and HGI, on a combined
basis, EBITDA of at least $3,000,000 for the 4 consecutive fiscal quarters ended
December 30, 2001.

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

          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; provided that, notwithstanding the foregoing, Foothill agrees to
extend for one year all Letters of Credit which expire during the Forbearance
Period.

          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

                                       2

<PAGE>

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 an
amount equal to $60,000.00, which forbearance fee shall be fully earned and
nonrefundable 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 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

                                       3

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(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 107% 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 and Prandium each covenant and agree that they each will
commence voluntary pre-negotiated or prepackaged Insolvency Proceedings under
Chapter 11 of the United States Bankruptcy Code on or before May 15, 2002. The
disclosure statement and plan of reorganization to be filed in the Chapter 11
Cases shall be in form and substance reasonably satisfactory to Foothill.

          4. 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 107% 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 is less than or equal
to $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 107% 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 third sentence of
this paragraph.

          5. FRI-MRD, Prandium, Borrower, each of their undersigned Affiliates
and Foothill each agree that the first sentence of Section 3.4 of the Loan
                                                   -----------
Agreement is hereby amended and restated in its entirety as follows:

          "This Agreement shall become effective upon the later of (a) the
execution and delivery of this Agreement by Prandium, FRI-MRD, Borrower,
Foothill, and each of the other parties hereto, and (b) the Closing Date, and
shall continue in full force and effect for a term ending on June 30, 2002 (the
"Maturity Date")."

          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) June 30, 2002 (or such later
date as Foothill may designate in writing in its sole discretion) or (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

                                       4

<PAGE>

Guarantor or any of their Affiliates to comply with the requirements set forth
in Sections 7.20 or 7.21 of the Loan Agreement.
   -------- ----    ----

          In the event of a direct conflict between the provisions of this
letter agreement and the provisions of that certain letter agreement, dated as
of January 10, 2002, both such documents shall be read together and construed,
to the fullest extent possible, to be in concert with each other. In particular,
nothing in this letter agreement shall affect the amendments to Sections 2.2(e)
                                                                --------------
and 3.6 of the Loan Agreement that were made pursuant to the terms of the letter
-------
agreement, dated as of January 10, 2002.

          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 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: VP & Treasurer


PRANDIUM, INC.,
a Delaware corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: Illegible


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: VP & Treasurer


CCMR OF MARYLAND, INC.,
a Delaware corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF CATONSVILLE, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF GREENBELT, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF RITCHIE HIGHWAY, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer

<PAGE>

CCMR OF CUMBERLAND, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF HARFORD COUNTY, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


MAINTENANCE SUPPORT GROUP, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF FREDERICK, INC.,
a Kentucky orporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF INNER HARBOR, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer

<PAGE>

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


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


KOO KOO ROO, INC.,
a Delaware corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


THE HAMLET GROUP, NC.,
a California corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


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 March 13, 2002
  --------
(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: VP & Treasurer


CCMR OF MARYLAND, INC.,
a Delaware corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer

<PAGE>

CCMR OF CATONSVILLE, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF GREENBELT, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF RITCHIE HIGHWAY, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF CUMBERLAND, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF HARFORD COUNTY, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer

<PAGE>

MAINTENANCE SUPPORT GROUP, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF FREDERICK, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


CCMR OF INNER HARBOR, INC.,
a Kentucky corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


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


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer


KOO KOO ROO, INC.,
a Delaware corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer

<PAGE>

THE HAMLET GROUP, INC.,
a California corporation


By /s/ R. T. Trebing, Jr.
   ---------------------------
Title: VP & Treasurer