Exhibit 4.04(d)
THE FIRST NATIONAL BANK OF BOSTON
100 Federal Street
Boston, Massachusetts 02110
Dated as of May 2, 1996
Quantum Restaurant Group, Inc.
The Peasant Restaurants, Inc.
Morton's of Chicago, Inc.
c/o Quantum Restaurant Group, Inc.
3333 New Hyde Park Road, Suite 210
New Hyde Park, New York 11042
Attention: Mr. Thomas J. Baldwin,
Senior Vice President, Finance,
Chief Financial Officer
Re: Closing of Certain Restaurants
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Gentlemen:
You have advised us that certain of your Subsidiaries plan (a) to close
certain restaurants operated by such Subsidiaries, listed on Schedule 1 attached
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hereto (the "Specified Restaurants") which are located at the locations listed
on such Schedule 1 (the "Specified Locations"), (b) to terminate the restaurant
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leases for such Specified Locations, and (c) to dispose of the assets of the
Specified Restaurants located at the Specified Locations (such transactions
being referred to, collectively, as the "Restaurant Closings").
You have asked us to consent to the Restaurant Closings under the Second
Amended and Restated Revolving Credit Agreement dated as of June 19, 1995, as
amended, modified, or supplemented from time to time (the "Credit Agreement")
among each of you, The First National Bank of
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Boston ("FNBB") as a Lender, and FNBB as Agent for the Lenders thereunder (the
"Agent"). We also understand that, in connection with the Restaurant Closings,
the Companies expect to make certain related cash payments necessary to
consummate such Restaurant Closings, not exceeding in any event $1,155,000 in
the aggregate for all such Restaurant Closings, as determined on a cumulative
basis, and that you wish to make certain adjustments in the treatment, for
purposes of the Credit Agreement's financial covenants, of the applicable
accounting charges made or to be made in respect of such specified cash
payments, whether or not such charges would be treated as extraordinary expenses
under generally accepted accounting principles (such specified accounting
charges, if any, being referred to as the "Restaurant Closing Expenses").
Capitalized terms used herein but not defined in this letter agreement
shall have the meanings given those terms in the Credit Agreement.
Effective upon the execution and delivery to the Agent of counterparts of
this letter agreement signed by each of the Borrowers, the Guarantors, the
Agent, and the Lenders, the parties hereto hereby agree as follows:
1. The Agent and the Lenders hereby consent to the Restaurant Closings
described above.
2. Any applicable charge in respect of the Restaurant Closing Expenses
shall be excluded from the calculation of Consolidated Net Worth under the
Credit Agreement.
3. For purposes of Section 10.2 of the Credit Agreement, any applicable
charge in respect of the Restaurant Closing Expenses shall be excluded from the
calculation of the Interest Coverage Ratio.
4. For purposes of Section 10.6 of the Credit Agreement, any applicable
charge in respect of the Restaurant Closing Expenses shall be excluded from the
calculation of the Cash Flow Coverage Ratio.
5. Except as otherwise expressly provided herein, the provisions of the
Credit Agreement and the other Loan Documents shall be unaffected hereby and
shall continue in full force and effect.
This letter agreement may be executed in counterparts, and shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of choice
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of law. Kindly evidence your agreement to the foregoing by providing to the
Agent counterparts of this letter agreement signed by each of the Borrowers, the
Guarantors, the Agent, and the Lenders, whereupon this letter agreement will
take effect and become binding upon the parties hereto, effective as of the date
hereof. We expect that the substantive provisions of this letter agreement may
be incorporated into a more formal, mutually acceptable amendment to the Credit
Agreement to be entered into at an appropriate time in the future.
Sincerely yours,
THE FIRST NATIONAL BANK
OF BOSTON, as Agent
and as a Lender
By: /s/ Rod Guinn
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Name: Rod Guinn
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Title: Director
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Accepted and agreed to by each of:
QUANTUM RESTAURANT GROUP, INC.
THE PEASANT RESTAURANTS, INC.
MORTON'S OF CHICAGO, INC.
By: /s/ Thomas J. Baldwin
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Name: Thomas J. Baldwin
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Title: S.V.P., Finance and C.F.O.
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Consented and agreed to by each of:
THE GUARANTORS (as defined in the Credit Agreement)
By: /s/ Thomas J. Baldwin
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Name: Thomas J. Baldwin
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Title: S.V.P., Finance and C.F.O.
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Schedule 1
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List of Restaurant Closings For Letter
Agreement Dated as of May 2, 1996
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1. The Mick's restaurant located at Seventh Street in Minneapolis, Minnesota
2. The Mick's restaurant located at the Bellevue in Philadelphia,
Pennsylvania.
3. The Mick's restaurant located at Willow Grove, Pennsylvania.
4. The Mick's restaurant located at Hickory Hollow in Nashville, Tennessee.
5. The Mick's restaurant located at Rivergate in Nashville, Tennessee.
6. The Pleasant Peasant restaurant located at 1500 Locust Street in
Philadelphia, Pennsylvania.