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Exhibit 10.6
[LETTERHEAD OF MAGIC RESTAURANTS, INC.]
December 27, 1996
Teleferscot International Limited
00 Xxxxxx Xxx
Xxxxxxx Xxxxxx X00XX
Re: In re: Magic Restaurants, Inc., et al; Case No. 95-376, etc., in the
United States Bankruptcy Court for the District of Delaware
Dear Sirs:
This letter will confirm the agreement ("Agreement") and firm
commitment by Teleferscot International Limited ("Teleferscot") to provide
permanent financing to Magic Restaurants, Inc. ("MRI") and certain of its
subsidiaries, in connection with the contemplated confirmation of MRI's Second
Amended Plan of Reorganization (as presently filed or as subsequently amended,
the "Plan"). We have agreed as follows:
1. Teleferscot has previously advanced $400,000 to MRI pursuant to a
debtor-in-possession loan (the "DIP Loan"). The DIP Loan was approved, on
an interim basis, by the United States Bankruptcy Court for the District
of Delaware ("Bankruptcy Court") by Order dated November 27, 1996. A final
hearing to approve the DIP Loan is scheduled to take place in the
Bankruptcy Court on December 30, 1996. MRI will seek authorization at that
hearing to borrow up to US $3.3 million from Teleferscot pursuant to the
DIP Loan.
2. If the Bankruptcy Court approves the DIP Loan on a final basis
and MRI is authorized to borrow US $3.3 million thereunder, Teleferscot
agrees that it will promptly advance to MRI such amounts as MRI may
request be advanced from time to time, up to a total principal advance
(counting the $400,000 outstanding on this date) of US $3.3 million.
3. All advances committed to be made by Teleferscot to MRI hereunder
shall be made so as to be received by MRI in available domestic funds no
later than January 20, 1997.
4. The terms of the DIP Loan to Teleferscot shall be those terms set
forth in the credit agreement and order signed by the Bankruptcy Court on
November 27, 1996, with such other amendments or modifications as may be
made to the credit agreement at the final
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hearing on the DIP Loan. You have previously been provided a copy of the
November 27, 1996 order of the Bankruptcy Court, including the
accompanying credit agreement.
5. You have previously been provided and have reviewed a copy of the
Plan, including all technical amendments and modifications made to the
Plan through and including December 5, 1996. The DIP Loan you have made
and have committed to make in the future constitutes the "Post-petition
Series B Notes" referred to under the Plan. You agree to consent to the
treatment of your claims from the DIP Loan set forth in Article III.A.1.d.
of the Plan.
6. Exclusive venue regarding any dispute between you and MRI arising
out of or relating to this Agreement, the Plan, or the DIP Loan shall lie
in the Bankruptcy Court. You agree to submit to the jurisdiction of the
Bankruptcy Court for any action arising out of or relating to this
Agreement, the Plan, or the DIP Loan.
7. You acknowledge and agree that MRI and its creditors are relying
on your commitment to fully fund the DIP Loan, and that the interests of
MRI and its creditors may be materially adversely affected if you fail to
fulfill your commitment.
Please counter-sign this letter to indicate your acknowledgment and
agreement to the terms of this Agreement, and return a copy to me at the
earliest possible time.
Yours very truly,
/S/
Xxxxxxx Xxxxx, Xx., Chief Executive Officer
Magic Restaurants, Inc.
AGREED:
TELEFERSCOTT INTERNATIONAL LIMITED
By: /S/
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