Document:

<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

<PAGE>

(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<PAGE>

                                                                  Exhibit 10(ff)

                               MACKAY SHIELDS LLC
                              9 West 57/th/ Street
                                  33/rd/ Floor
                                  New York, NY

                                                                  March 26, 2002

VIA FACSIMILE (949-724-9914)

PRANDIUM, INC.
FRI-MRD CORPORATION
2701 Alton Parkway
Irvine, CA 92606
Attn:  Robert T. Trebing, Jr.

                           Re: Prandium Restructuring
                               ----------------------
Dear Bob:

                  It is a requirement of the Letter of Intent entered into
between Prandium, Inc. ("Prandium"), FRI-MRD Corporation ("FRI-MRD") and MacKay
Shields Financial Corporation ("MacKay") concerning the restructuring of the
capital structure of Prandium and FRI-MRD, that FRI-MRD (i) execute an agreement
for the sale of stock and/or assets of the Hamburger Hamlet restaurant business
("Hamlet") no later than October 31, 2001 and (ii) consummate such sale no later
than ninety days after the execution of such agreement. It is a further
requirement of the Letter of Intent that FRI-MRD use its commercially reasonable
efforts to file a plan of reorganization under the Bankruptcy Code as a
pre-negotiated or pre-packaged Chapter 11 case on or before 60 days from the
date of the Letter of Intent and use commercially reasonable efforts to have
such plan of reorganization confirmed under the Bankruptcy Code on or before
February 28, 2002. We understand that the Stock Purchase Agreement dated as of
October 23, 2001 by and between FRI-MRD Corporation and Othello Holding
Corporation for the sale of Hamlet has been terminated. The failure to
consummate a sale of Hamlet constitutes a breach of the covenants of the Letter
of Intent. Pursuant to the terms and conditions of the Letter of Intent, MacKay
may elect in its sole discretion to waive this breach and the deadlines to
commence a Chapter 11 case and confirm a plan of reorganization. Capitalized
terms used herein and not otherwise defined shall have the meaning assigned to
such terms in the Letter of Intent.

                  MacKay, acting as representative of the Majority Holders, is
willing to waive the above-described breach and to remain bound by the Letter of
Intent, including in particular the standstill provision contained therein if
you agree to the following terms and conditions, which shall be deemed to modify
and amend the Letter of Intent:

<PAGE>

          1.  Pending a sale of Hamlet, from and after April 1, 2002, all free
cash flow derived from the continued operation of Hamlet must be applied to the
Facilities (as defined in the Letter of Intent) on a quarterly basis at the
prepayment rate agreed upon in the Letter of Intent. The payment of any amounts
due during the pendency of the Chapter 11 case shall be deferred until the
Effective Date of the Plan.

          2.  The stock of Hamlet shall be pledged to secure repayment of the
New FRI-MRD Notes (as defined below), and upon a sale of Hamlet, such stock
shall be released and all net sale proceeds applied to the Facilities at the
prepayment rate agreed upon in the Letter of Intent.

          3.  Capital expenditures of Hamlet must not exceed $500,000 per year.

          4.  From the Effective Date until the notes ("New FRI-MRD Notes") to
be issued to the holders of 15% Notes under the Plan are paid in full, the
holders of the New FRI-MRD Notes, as a class, will be entitled to designate one
independent director to Reorganized Prandium's five member board of directors.
The independent director shall be a third party unaffiliated with MacKay or any
holder of New FRI-MRD Notes.

          5.  MacKay, with input from the Prandium Bondholders, shall designate
and retain for the benefit of the FRI-MRD Noteholders and the Prandium
Bondholders, at Prandium's expense up to an amount not to exceed $150,000, a
financial advisor who will be given a full opportunity to review the current
operations and financial condition of Prandium and FRI-MRD. The financial
advisor's review will not delay documentation or solicitation.

          6.  As soon as practicable, Prandium shall provide MacKay with revised
deadlines for the commencement of the Chapter 11 case and consummation of the
Plan, each of which shall be satisfactory to MacKay. The Letter of Intent shall
be deemed amended to incorporate such agreed upon revised deadlines.

          MacKay, as representative of the Majority Holders, previously agreed
to modify the Additional Covenants in the new note agreement to authorize
permitted Indebtedness under a senior secured credit facility with Foothill
Capital Corporation in an amount not to exceed $15 million at any one time.
MacKay further agreed that rather than a pro rata application of the $30 million
Cash Prepayment between the Facilities on the Effective Date, the holders of 14%
Secured Notes shall receive their pro rata share of $18 million in full
satisfaction of their claims, and the holders of 15% Notes shall receive their
pro rata share of approximately $12 million, plus the New FRI-MRD Notes in full
satisfaction of their claims.

          Other than as expressly set forth herein, nothing contained in this
letter shall be deemed to limit, waive, release or modify the rights of MacKay,
the Majority Holders, Prandium or FRI-MRD or the terms and conditions of the
Letter of Intent, in any way, all of which rights, terms and conditions are
expressly reserved and shall continue to remain in effect.

<PAGE>

     Please acknowledge your acceptance and agreement to be bound by the above
terms and conditions by signing and returning the enclosed copy.

                                    Very truly yours,

                                    MACKAY SHIELDS FINANCIAL CORPORATION

                                    By: /S/  Donald E. Morgan III
                                        ----------------------------------------

                                    Name:  Donald E. Morgan III
                                    Title: Managing Director

                  [Prandium and FRI-MRD signature page follows]

<PAGE>

PRANDIUM, INC.

By: /S/ Robert T. Trebing, Jr.
    --------------------------------------------

Name:  Robert T. Trebing, Jr.
Title: EVP/CFO

FRI-MRD CORPORATION

By: /S/ Robert T. Trebing, Jr.
    --------------------------------------------

Name:  Robert T. Trebing, Jr.
Title: President

cc:    Alan Kornberg, Esq.   (212-757-3990)
       Richard Levin, Esq.   (213-621-5940)
       Monica Shilling, Esq. (213-621-5310)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]