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EXHIBIT 10.20
LETTER AGREEMENT
THIS AGREEMENT is made this 22nd day of March, 1995 by and
among MG TRADE FINANCE CORP., a Delaware corporation ("MGTF"), CITIZENS BANK
AND TRUST COMPANY, a Missouri bank ("CBTC") and AMERICAN INTERNATIONAL
REFINERY, INC., a Louisiana corporation ("AIRI").
WITNESSETH:
WHEREAS, MGTF is entering into a Subordination and Standby
Agreement (the "MGTF Agreement") dated the date hereof, with Gold Line
Refining, Ltd., a Texas limited partnership ("Gold Line") and NationsBank of
Texas, N.A., a national bank ("NationsBank"), whereby the MGTF Obligations (as
defined in the MGTF Agreement) shall be fully subordinated in right of payment
and claim in favor of the NationsBank Obligations (as defined in the MGTF
Agreement) and
WHEREAS, CBTC is entering into a Subordination and Standby
Agreement (the "CBTC Agreement") dated the date hereof, with Gold Line and
NationsBank, whereby the CBTC Obligations (as defined in the CBTC Agreement)
shall be fully subordinated in right of payment and claim in favor of the
NationsBank Obligations (as defined in the CBTC Agreement); and
WHEREAS, AIRI is entering into a Subordination and Standby
Agreement (the "AIRI Agreement") dated the date hereof, with Gold Line and
NationsBank, whereby the AIRI Obligations (as defined in the AIRI Agreement)
shall be fully subordinated in right of payment and claim in favor of the
NationsBank Obligations (as defined in the AIRI Agreement); and
WHEREAS, CBTC is issuing an irrevocable standby letter of
credit, dated on or about the date hereof, in favor of NationsBank as
beneficiary (the "Letter of Credit") in the amount of $1,700,000 pursuant to
the CBTC Agreement; and
WHEREAS, MGTF, CBTC and AIRI each desire to make the
agreements set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. CBTC agrees that it will not take any action to amend or in any way
alter, nor will it allow Gold Line or NationsBank to amend or in any
way alter, the terms of the CBTC Agreement without the prior written
consent of MGTF and AIRI.
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2. AIRI agrees that it will not take any action to amend or in any way
alter, nor will it allow Gold Line or NationsBank to amend or in any
way alter, the terms of the AIRI Agreement without the prior written
consent of MGTF and CBTC.
3. MGTF agrees that it will not take any action to amend or in any way
alter, nor will it allow Gold Line or NationsBank to amend or in any
way alter, the terms of the MGTF Agreement without the prior written
consent of AIRI and CBTC.
4. CBTC agrees that it will not take any action to amend or in any way
alter, nor will it allow NationsBank to amend or in any way alter, the
terms of the Letter of Credit, except to provide extensions thereto,
without the prior written consent of MGTF.
5. CBTC agrees that in the event that the Letter of Credit is about to
expire without NationsBank having transferred the Letter of Credit to
MGTF, then, to the extent that any of the MGTF Obligations existing on
the date hereof are still outstanding, (i) CBTC will use its beat
efforts to extend the term of the Letter of credit or (ii) immediately
upon the expiration of the Letter of Credit will issue to MGTF a
letter of credit for any undrawn portion under the Letter of Credit.
6. Each of CBTC and MGTF acknowledges and affirms the subordination
provisions set forth in the terms of the letter agreement, dated on or
about November 15, 1990, from CBTC to MGTF, as amended by the letter
agreement, dated on or about April 15, 1991, from CBTC to MGTF.
7. The term of this Agreement shall terminate upon the termination of the
MGTF Agreement, the CBTC Agreement and the AIRI Agreement.
8. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
9. This Agreement is binding upon and inures to the benefit of the
parties hereto and their respective assignees, transferees, and
successors.
10. This Agreement may be executed in counterparts, each of which shall be
an original, but all of which, taken together, shall constitute the
one and the same instrument.
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IN WITNESS WHEREOF, each of MGTF, CBTC and AIRI have executed
this Agreement by their duly authorized officers as of the date first above
written.
MG TRADE FINANCE CORP.
By: /s/ William D. Rutherford
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Name: William D. Rutherford
Title: Director of Special Projects
By: /s/ Tommy L. Byrd
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Name: Tommy L. Byrd
Title: Vice President
CITIZENS BANK AND TRUST COMPANY
By: /s/ Edward D. Douglas
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Name: Edward D. Douglas
Title: President
AMERICAN INTERNATIONAL REFINERY, INC.
By: /s/ George N. Faris
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Name: George N. Faris
Title: CEO
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LETTER AGREEMENT
THIS AGREEMENT is made this 22nd day of March, 1995 by and
among MG TRADE FINANCE CORP., a Delaware corporation ("Lender"), and AMERICAN
INTERNATIONAL REFINERY, Inc., a Louisiana corporation ("Borrower").
WITNESSETH:
WHEREAS, Lender and Borrower have entered into a Loan and
Security Agreement dated as of December 4, 1990 (such agreement, as amended,
the "Loan Agreement") ; and
WHEREAS, Borrower is entering into a Subordination and Standby
Agreement (the "AIRI Agreement"), dated the date hereof, with Gold Line
Refining, Ltd., a Texas limited partnership ("Gold Line") and NationsBank of
Texas, N.A., a national bank; and
WHEREAS, Lender is entering into a Subordination and Standby
Agreement (the "MGTF Agreement"), dated the date hereof, with Gold Line and
NationsBank; and
WHEREAS, capitalised terms used herein but not defined shall
have the meanings assigned to such terms in the Loan Agreement; and
WHEREAS, Lender and Borrower each desire to make the
agreements set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Notwithstanding anything to the contrary contained in the Loan
Agreement, Lender and Borrower hereby agree that the Termination Date
of the Loan shall be March 31, 1998;
2. Notwithstanding anything to the contrary contained in the Loan
Agreement, Lender and Borrower hereby agree that Borrower will pay to
Lender fifty percent (50%) of all lease rental payments received by
Borrower pursuant to the Gold Line Lease. Any lease rental payments
received by Borrower pursuant to this paragraph 2 shall be applied
first to accrued interest on the Loan and then to outstanding
principal; provided, however, that Borrower will pay to Lender on the
last day of each month accrued but unpaid interest due for such month.
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3. Notwithstanding anything to the contrary contained in the Loan
Agreement, Lender and Borrower hereby agree that Borrower will pay to
Lender fifty percent (50%) of all payments received by Borrower
pursuant to the AIRI Agreement. Any payments received by Borrower
pursuant to this paragraph 3 shall be applied towards repayment of the
outstanding principal of the Loan.
4. Lender and Borrower hereby agree that to the extent that payments made
by Gold Line pursuant to the AIRI Agreement and the MGTF Agreement are
insufficient to cover the amounts due to AIRI and MGTF on the AIRI
Note (as defined in the AIRI Agreement) and the MGTF Note (as defined
in the MGTF Agreement), respectively, any such payments made shall be
shared pro rata by AIRI and MGTF in proportion to the amounts due
under the AIRI Note and the MGTF Note, respectively.
5. Notwithstanding anything to the contrary contained in the Loan
Agreement, Lender and Borrower hereby agree that Borrower will pay to
Lender interest on the Loan at a fluctuating rate which is equal to
one percent (1%) per annum above Prime Rate.
6. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
7. This Agreement is binding upon and inures to the benefit of the
parties hereto and their respective assignees, transferees, and
successors.
8. This Agreement may be executed in counterparts, each of which shall be
an original, but all of which, taken together, shall constitute the
one and the same instrument.
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IN WITNESS WHEREOF, Lender and Borrower have executed this
Agreement by their duly authorized officers as of the date first above written.
MG TRADE FINANCE CORP.
By: /s/ William D. Rutherford
------------------------------------------
Name: William D. Rutherford
Title: Director of Special Projects
By: /s/ Tommy L. Byrd
------------------------------------------
Name: Tommy L. Byrd
Title: Vice President
AMERICAN INTERNATIONAL REFINERY, INC.
By: /s/ George N. Faris
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Name: George N. Faris
Title: CEO
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