Exhibit 10.68
May 14, 2003
Xx. Xxxx X. Xxxxxx
Chief Financial Officer
Xxxxx & Wollensky Restaurant Group, Inc.
0000 Xxxxx Xxxxxx, 0xx Xxx.
New York, NY 10021
Dear Xxxx,
This letter is to confirm the following understandings of Xxxxxx Xxxxxxx
Xxxx Xxxxxx Commercial Financial Services, Inc. ("Lender") with reference to the
Term Loan Agreement dated August 23, 2002 ("First Loan Agreement"), among S&W of
Las Vegas, LLC ("Borrower"), Xxxxx & Wollensky Restaurant Group, Inc.
("Guarantor") and Xxxxxx and the Term Loan Agreement dated December 24, 2002
("Second Loan Agreement"; and together with the First Loan Agreement, the "Term
Loan Agreements"), among Borrower, Guarantor, Xxxxxx S&W, L.P. ("Dallas") and
Xxxxxx:
1) Xxxxxxxx has entered into a Second Amendment to Lease Agreement
("Second Amendment") between Xxxxxxxx Limited Partnership
("Lessor") and Borrower dated as of April 29, 2003, which Second
Amendment modifies that certain Lease with an Option to Purchase
dated February 9, 1998 between the Borrower and Lessor, as
previously amended by a First Amendment to Lease Agreement dated
May 8, 1998 (the "Ground Lease"), and Xxxxxx has consented to the
terms of such Second Amendment. Borrower, Guarantor, Dallas and
Lender are in the process of finalizing amendments to the Term
Loan Agreements pertaining to the effect of the Second Amendment.
2) Guarantor has informed Lender that under GAAP (as defined in each
of the First Loan Agreement and the Second Loan Agreement),
Guarantor is required to account for the Ground Lease as modified
by the Second Amendment as a capital lease and, accordingly, is
required to treat some or all of the rental payments under the
Ground Lease as so amended as payments of principal or interest
("Capital Lease Debt"). Accordingly, Xxxxxxxx and Guarantor have
requested that Xxxxxx agree with them as follows regarding the
treatment of such Capital Lease Debt under the Term Loan
Agreements:
a. Capital Lease Debt will be permitted debt under Section
5.02(c) of each of the Term Loan Agreements;
b. Capital Lease Debt will be excluded from the calculations
of (i) interest expense and current portion of long term
debt in determining the Debt
Service Coverage Ratio; (ii) unsubordinated funded debt
for purposes of the determining the Senior Leverage Ratio;
and (iii) interest expense in determining the Interest
Coverage Ratio, all as set forth in Section (f) of
Schedule II of each of the Term Loan Agreements.
3) Borrower, Guarantor and Dallas have agreed with Lender to enter
into formal amendments to the Term Loan Agreements (as part of or
in addition to the amendments referred to in paragraph 1 above),
which amendments will reflect the foregoing general principles
and such reasonable refinements thereof as Lender shall require.
Very truly yours,
/s/ Xxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxxxxx
Vice President
