Exhibit 10.2

LETTER OF CREDIT FACILITY AGREEMENT

dated as of

December 27, 2012

among

PAR PETROLEUM CORPORATION,

as Borrower,

COMPASS BANK,

as Lender

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This Letter of Credit Facility Agreement, dated as of December 27, 2012 (the
“Effective Date”), is among PAR PETROLEUM CORPORATION, a Delaware corporation
(the “Borrower”) and COMPASS BANK as lender (the “Lender”).

R E C I T A L S

A. The Borrower has requested that the Lender provide extensions of credit on
behalf of the Borrower.

B. The Lender has agreed to make such extensions of credit subject to the terms
and conditions of this Agreement.

C. In consideration of the mutual covenants and agreements herein contained and
extensions of credit and commitments hereinafter referred to, the parties hereto
agree as follows:

ARTICLE I

Definitions and Accounting Matters

Section 1.01 Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” means this Letter of Credit Facility Agreement, as the same may from
time to time be amended, modified, supplemented or restated.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the LIBO Rate for a one month
interest period in effect on such day plus 3.50%. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
the LIBO Rate shall be effective from and including the effective day of such
change in the Prime Rate, the Federal Funds Effective Rate and the LIBO Rate,
respectively.

“Availability Period” means the period from and including the Effective Date to
but excluding the Termination Date.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

“Borrower” has the meaning given in the introductory paragraph.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Houston, Texas, are authorized or required by law to
remain closed.

“Cash Collateral Account” means the account established by Borrower with Lender
for the benefit of the Lender and designated as account no. 6703130060 on the
Effective Date.

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by the Lender by any lending office of
such Lender or by such Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

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“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.

“Collateral Value” means, as of any date of determination, the aggregate dollar
value of the cash or cash equivalents on deposit in the Cash Collateral Account.

“Commitment” means $30,000,000.

“Complete Collateral Compliance” as of any date means that as of such date the
Collateral Value is equal to or greater than the Required Collateral Amount.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. For the
purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly 25% or more of the Equity
Interests having ordinary voting power for the election of the directors or
other governing body of a Person (other than as a limited partner of such other
Person) will be deemed to “control” such other Person. “Controlling” and
“Controlled” have meanings correlative thereto.

“Debt” means, for any Person, the sum of the following (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services; (d) all
capital lease obligations; (e) all obligations under synthetic Leases; (f) all
Debt (as defined in the other clauses of this definition) of others secured by a
Lien on any Property of such Person, whether or not such Debt is assumed by such
Person; (g) all Debt (as defined in the other clauses of this definition) of
others guaranteed by such Person or in which such Person otherwise assures a
creditor against loss of the Debt (howsoever such assurance shall be made) to
the extent of the lesser of the amount of such Debt and the maximum stated
amount of such guarantee or assurance against loss; (h) all obligations or
undertakings of such Person to maintain or cause to be maintained the financial
position or covenants of others or to purchase the Debt or Property of others;
(i) obligations to deliver commodities, goods or services, in consideration of
one or more advance payments, other than gas balancing arrangements in the
ordinary course of business; (j) any Debt of a partnership for which such Person
is liable either by agreement, by operation of law or by a Governmental
Requirement but only to the extent of such liability; (k) preferred stock; and
(l) the undischarged balance of any production payment created by such Person or
for the creation of which such Person directly or indirectly received payment.
The Debt of any Person shall include all obligations of such Person of the
character described above to the extent such Person remains legally liable in
respect thereof notwithstanding that any such obligation is not included as a
liability of such Person under GAAP.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Deposit Account Control Agreement” means the Deposit Account Control Agreement
executed by Borrower in substantially the form attached hereto as Exhibit A.

“dollars” or “$” refers to lawful money of the United States of America.

“Effective Date” has the meaning given in the introductory paragraph.

“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety, the environment or the preservation or reclamation of
natural resources, in effect in any and all jurisdictions in which the Borrower
or any Subsidiary is conducting or at any time has conducted business, or where
any Property of the Borrower or any Subsidiary is located, including without
limitation, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air
Act, as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976

 

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(“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection Governmental Requirements.
The term “oil” shall have the meaning specified in OPA, the terms “hazardous
substance” and “release” (or “threatened release”) have the meanings specified
in CERCLA, the terms “solid waste” and “disposal” (or “disposed”) have the
meanings specified in RCRA and the term “oil and gas waste” shall have the
meaning specified in Section 91.1011 of the Texas Natural Resources Code
(“Section 91.1011”); provided, however, that (a) in the event either OPA,
CERCLA, RCRA or Section 91.1011 is amended so as to broaden the meaning of any
term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment and (b) to the extent the laws of the state or
other jurisdiction in which any Property of the Borrower or any Subsidiary is
located establish a meaning for “oil,” “hazardous substance,” “release,” “solid
waste,” “disposal” or “oil and gas waste” which is broader than that specified
in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning shall
apply.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means each trade or business (whether or not incorporated)
that, together with the Borrower or a Subsidiary is treated as a “single
employer” under Section 414(b) or (c) of the Code, or solely for the proposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30 day notice period is waived); (b) the existence with
respect to any Plan of a failure to meet the minimum funding standards under
Section 412 of 430 of the Code or Section 303 of ERISA; (c) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (d) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (e) the determination that any Plan is
considered an “at risk” plan or a plan in endangered or critical status within
the meaning of Section 430 of the Code or Section 303 of ERISA; (f) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

“Event of Default” has the meaning assigned such term in Section 10.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means, with respect to the Lender, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of America
or such other jurisdiction under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located and (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, New York or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.

 

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“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government over the
Borrower, any Subsidiary, any of their Properties or the Lender.

“Governmental Requirement” means any applicable law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization or other legal requirement, whether now or
hereinafter in effect, including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls, of any
Governmental Authority.

“Highest Lawful Rate” means, as to any Lender, the maximum non-usurious interest
rate, if any (or, if the context so requires, an amount calculated at such
rate), that at any time or from time to time may be contracted for, taken,
reserved, charged, or received by such Lender under applicable laws with respect
to an obligation, as such laws are presently in effect or, to the extent allowed
by applicable law, as such laws may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than such laws now allow. The
determination of the Highest Lawful Rate shall, to the extent required by
applicable law, take into account as interest paid, taken, received, charged,
reserved or contracted for any and all relevant payments or charges under the
Loan Documents.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including, without
limitation, any “short sale” or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale) or any
capital contribution to any other Person; (b) the making of any deposit with, or
advance, loan or capital contribution to, assumption of Debt of, purchase or
other acquisition of any other Debt or equity participation or interest in, or
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person); or (c) the
entering into of any guarantee of, or other contingent obligation (including the
deposit of any Equity Interests to be sold) with respect to, Debt or other
liability of any other Person and (without duplication) any amount committed to
be advanced, lent or extended to such Person.

“Jefferies Credit Agreement” means that certain Delayed Draw Term Loan Credit
Agreement dated as of August 31, 2012, by and among the Borrower, the Guarantors
party thereto, the lenders party thereto and Jefferies Finance LLC, as
administrative agent for the lenders as in effect on the date hereof, without
giving effect to any subsequent amendments or waiver thereto.

“LC Disbursement” means a payment made by the Lender pursuant to a Letter of
Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.

“Lender” has the meaning given in the introductory paragraph.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

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“Letter of Credit Applications” means all letter of credit applications and
other agreements (including any amendments, modifications or supplements
thereto) submitted by the Borrower, or entered into by the Borrower, with Lender
relating to any Letter of Credit.

“LIBO Rate” means, the rate appearing on Reuters BBA Libor Rates LIBOR01 (or on
any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the Lender
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) as the rate for
dollar deposits of $5,000,000 with a maturity of one month.

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) royalties, production payments and the like. The
term “Lien” shall include easements, restrictions, servitudes, permits,
conditions, covenants, encroachments, exceptions or reservations. For the
purposes of this Agreement, the Borrower and its Subsidiaries shall be deemed to
be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.

“Loan Documents” means this Agreement, the Letter of Credit Applications, the
Letters of Credit, the Note, the Security Instruments and each other
certificate, document, instrument or agreement from time to time executed by
Borrower or any Responsible Officer and delivered in connection with this
Agreement.

“Loan Parties” means the Borrower and each Subsidiary that is a party to any
Loan Document.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, Property or condition (financial or otherwise) of the Borrower and
the Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform
any of its obligations under any Loan Document, (c) the validity or
enforceability of any Loan Document or (d) the rights and remedies of or
benefits available to the Lender under any Loan Document.

“Material Indebtedness” means other Debt (other than the Letters of Credit), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding
$100,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any Subsidiary in respect of any
Swap Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.

“Maturity Date” means December 26, 2013.

“Note” means the promissory note of the Borrower described in Section 2.08 and
being substantially in the form of Exhibit B, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.

“Obligations” means, without duplication, (a) all Debt evidenced hereunder,
(b) the obligation of the Loan Parties for the payment of the fees payable
hereunder or under the other Loan Documents, and (c) all other obligations and
liabilities (monetary or otherwise, whether absolute or contingent, matured or
unmatured) of the Loan Parties to the Lender, including reimbursement
obligations with respect to LC Disbursements, in each case now existing or
hereafter incurred under, arising out of or in connection with any Loan
Document, and to the extent that any of the foregoing includes or refers to the
payment of amounts deemed or constituting interest, only so much thereof as
shall have accrued, been earned and which remains unpaid at each relevant time
of determination.

 

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“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement and any other Loan Document.

“Participant” has the meaning set forth in Section 11.04(c)(i).

“Patriot Act” has the meaning set forth in Section 11.14.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA, and any successor entity performing similar functions.

“Permitted Holders” means any Beneficial Owner of Equity Interest of the
Borrower on the Effective Date.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer
Plan), subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” means the prime rate of interest published by the Wall Street
Journal from time to time; each change in the Prime Rate shall be effective from
and including the date such change is published as being effective.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.

“Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment or defeasance (or the segregation of funds with respect to
any of the foregoing) of such Debt. “Redeem” has the correlative meaning
thereto.

“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.

“Required Collateral Amount” means, at any time, 105% of the LC Exposure.

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
Chief Operating Officer, the President, any Financial Officer or any Vice
President of the Borrower.

“SEC” means the U.S. Securities and Exchange Commission or any successor
Governmental Authority.

“Security Instruments” means the security agreements, deposit account control
agreements and other agreements, instruments or certificates, and any and all
other agreements, instruments, certificates or certificates now or hereafter
executed and delivered by the Borrower or any other Person in connection with,
or as security for the payment or performance of the Obligations, this
Agreement, or reimbursement obligations under the Letters of Credit, as such
agreements may be amended, modified, supplemented or restated from time to time,
including, without limitation, the Deposit Account Control Agreement.

“Subsidiary” means (a) any Person of which at least a majority of the
outstanding Equity Interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors, manager or other governing body
of such Person (irrespective of whether or not at the time Equity Interests of
any other class or classes of such

 

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Person shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or Controlled by the
Borrower or one or more of its Subsidiaries or by the Borrower and one or more
of its Subsidiaries and (b) any partnership of which the Borrower or any of its
Subsidiaries is a general partner. Unless otherwise indicated herein, each
reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or the
Subsidiaries shall be a Swap Agreement.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Termination Date” means the earlier of the Maturity Date and the date of
termination of the Commitments.

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement, each other Loan Document to which it is a party, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder, and the grant
of Liens pursuant to the Security Instruments.

Section 1.02 Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any law shall be construed as referring to such law
as amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions
contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (e) with respect to the
determination of any time period, the word “from” means “from and including” and
the word “to” means “to and including” and (f) any reference herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement. No provision of this
Agreement or any other Loan Document shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such
provision. In the event of a conflict between this Agreement and the Application
for Letter of Credit, the Application for Letter of Credit shall control. In the
event of a conflict between this Agreement and any Security Instrument, the
Security instrument shall control.

Section 1.03 Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Lender hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent except for changes in which
Borrower’s independent certified public accountants concur and which are
disclosed to Lender on the next date on which financial statements are delivered
to the Lender.

ARTICLE II

Letters of Credit

Section 2.01 General. Subject to the terms and conditions set forth herein, the
Borrower may, from time to time, request that Lender issue Letters of Credit in
dollars for its own account or for the account of any

 

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of its Subsidiaries, in a form reasonably acceptable to the Lender, at any time
during the Availability Period. In no event shall the aggregate face amount of
the Letters of Credit issued under this Agreement result in the LC Exposure
exceeding the Commitment. The reimbursement obligations of Borrower for LC
Disbursements shall be evidenced by the Note. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any Letter of Credit Application, the terms and conditions of this Agreement
shall control.

Section 2.02 Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Lender) to Lender (not less
than three (3) Business Days in advance of the requested date of issuance,
amendment, renewal or extension) a notice: (i) requesting the issuance of a
Letter of Credit or identifying the outstanding Letter of Credit issued by
Lender to be amended, renewed or extended; (ii) specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day);
(iii) specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.03); (iv) specifying the amount of such Letter of
Credit; (v) specifying the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit; and (vi) at least 2 Business Days prior to the requested date
of issuance, amendment, renewal or extension, the Borrower shall deposit cash in
the Cash Collateral Account necessary to achieve Complete Collateral Compliance
after giving effect to the issuance of the requested Letter of Credit (or
amendment, renewal or extension, as the case may be). If requested by the
Lender, the Borrower shall submit a letter of credit application on Lender’s
standard form in connection with any request for a Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if (and with respect
to each notice provided by the Borrower above and any issuance, amendment,
renewal or extension of each Letter of Credit, the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension the LC Exposure shall not exceed the Commitment.

Section 2.03 Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal, which
renewal may be provided for in the initial Letter of Credit, or extension
thereof, one year after such renewal or extension) and (ii) the date that is
twenty (20) Business Days prior to the Maturity Date.

Section 2.04 Reimbursement. If the Lender shall make any LC Disbursement, the
Borrower authorizes Lender to pay such LC Disbursement from the funds on deposit
in the Cash Collateral Account, or at its option Borrower may reimburse such LC
Disbursement by paying to the Lender an amount equal to such LC Disbursement not
later than 12:00 noon, Houston, Texas time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Houston, Texas time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 12:00 noon, Houston, Texas time, or the Business Day
immediately following the date that Borrower receives such notice. In the event
that the Cash Collateral Account does not have sufficient funds to reimburse
Lender for any LC Disbursement and the Borrower fails to otherwise reimburse
Lender by the time specified in the preceding sentence, the Borrower agrees to
pay to the Lender forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such LC Disbursement is made
to but excluding the date of payment to the Lender, at the interest rate set
forth in Section 2.07.

Section 2.05 Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.05 shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Application or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by Lender under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or any Letter of Credit Application, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.05,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder. Neither the Lender nor any of its
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error,

 

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omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Lender; provided that the foregoing shall not be construed to
excuse Lender from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by Lender’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Lender (as finally determined by a court of competent jurisdiction), the Lender
shall be deemed to have exercised all requisite care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Lender may, in its sole reasonable discretion, either accept and make payment
upon such documents without responsibility for further investigation, regardless
of any notice or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit.

Section 2.06 Disbursement Procedures. Lender shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Lender shall promptly notify the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether Lender
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Lender with respect to any such LC Disbursement.

Section 2.07 Interim Interest. If Lender shall make any LC Disbursement, then,
until the Borrower shall have reimbursed Lender for such LC Disbursement or
Lender shall have deducted such amount from the Cash Collateral Account, the
unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum equal to Alternate Base
Rate plus 2%.

Section 2.08 Note. The Borrower’s Obligations to lender shall be evidenced by a
single promissory note payable to the order of the Lender in substantially the
form of Exhibit B, dated as of the date of this Agreement.

ARTICLE III

Fees and Interest

Section 3.01 Fees.

(a) Letter of Credit Fees. The Borrower agrees to pay to the Lender (i) upon
issuance and upon any extension or renewal thereof, a Letter of Credit fee,
equal to 1.5% per annum of the stated face amount of each Letter of Credit
calculated for the number of days such Letter of Credit is to remain outstanding
based on its stated term, and (ii) its standard and customary fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit issued
by Lender or processing of drawings thereunder. The Letter of Credit fee shall
be payable upon issuance and upon any renewal of such Letter of Credit. Any
other fees payable to Lender pursuant to this Section 3.01(a) shall be payable
within 10 days after demand. All Letter of Credit fees and fronting fees shall
be computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

(b) Other Fees. The Borrower agrees to pay to the Lender all closings costs and
fees payable in the amounts and at the times specified in that certain Term
Sheet dated December 4, 2012 by and between Borrower and Lender, or otherwise
separately agreed upon between the Borrower and Lender (but without duplication
of the fees payable in Section 3.01(a)).

 

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Section 3.02 Post-Default Rate.

Notwithstanding the foregoing, if any fee or other amount payable by the
Borrower hereunder or under any other Loan Document is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to Alternate Base Rate plus two percent (2%), but in no event to exceed the
Highest Lawful Rate.

Section 3.03 Interest Rate Computations. All interest hereunder shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), except that interest
computed by reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate or LIBO Rate shall be determined by the
Lender, and such determination shall be conclusive absent manifest error, and be
binding upon the parties hereto.

ARTICLE IV

Payments.

Section 4.01 Payments Generally.

(a) Payments by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of fees or reimbursement of LC Disbursements,
or of amounts payable under Section 5.01 or otherwise) prior to 12:00 noon,
Houston, Texas time, on the date when due, in dollars that constitute
immediately available funds, without defense, deduction, recoupment, set-off or
counterclaim. Fees, once paid, shall not be refundable under any circumstances
absent manifest error (e.g., as a result of a clerical mistake). Any amounts
received after such time on any date may, in the discretion of the Lender, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the Lender at
its offices specified in Section 11.01. If any payment hereunder shall be due on
a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Lender to pay fully all amounts of unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of unreimbursed LC Disbursements
then due to such parties.

ARTICLE V

Taxes; Illegality

Section 5.01 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Loan Document shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; provided that
if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.01(a)), the, Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

 

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(b) Payment of Other Taxes by the Borrower. The Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Indemnification by the Borrower. The Borrower shall indemnify the Lender,
within ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Lender on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 5.01) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate of the Lender as
to the amount of such payment or liability under this Section 5.01 shall be
delivered to the Borrower and shall be conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Lender the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Lender.

(e) Tax Refunds. If the Lender determines, in its reasonable discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 5.01, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 5.01 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Lender in the event the Lender is
required to repay such refund to such Governmental Authority. This Section 5.01
shall not be construed to require the Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.

Section 5.02 Mitigation Obligations. If the Borrower is required to pay any
additional amount to the Lender or any Governmental Authority for the account of
the Lender pursuant to Section 5.01, then the Lender shall use reasonable
efforts to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of the Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 5.01 in the future and (ii) would not subject the Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to the
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by the Lender in connection with any such designation or assignment.

ARTICLE VI

Conditions Precedent

Section 6.01 Conditions to Effectiveness. This Agreement shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 11.02):

(a) The Lender shall have received all fees and other amounts due and payable,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

(b) The Lender shall have received a certificate of the Secretary or an
Assistant Secretary of the Borrower setting forth (i) resolutions of its board
of directors with respect to the authorization of Borrower to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of the Borrower
who are authorized to sign the Loan Documents to which Borrower is a party,
(iii) specimen signatures of such authorized officers, and (iv) the articles or
certificate of

 

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incorporation and bylaws of the Borrower, certified as being true and complete.
The Lender may conclusively rely on such certificate until the Lender receives
notice in writing from the Borrower to the contrary.

(c) The Lender shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of the
Borrower.

(d) The Lender shall have received counterparts (in such number as may be
requested by the Lender) of this Agreement signed on behalf of such party.

(e) The Lender shall have received a duly executed Note, in substantially the
form attached hereto as Exhibit B.

(f) The Lender shall have received duly executed counterparts (in such number as
may be requested by the Lender) of the Deposit Account Control Agreement in
respect of the Cash Collateral Account.

(g) The Lender shall have received the opinions of Porter Hedges LLP, special
counsel to the Borrower, in form reasonably acceptable to Lender.

(h) The Lender shall have received appropriate judgment, tax, bankruptcy and
Uniform Commercial Code search certificates reflecting no prior judgment or
taxes are outstanding or unpaid by the Borrower or Liens encumbering the
Properties of the Borrower.

(i) The Lender shall be reasonably satisfied that the Borrower has commenced the
transfer to or establishment with the Lender, of the required deposit accounts
of the Borrower and its Subsidiaries.

(j) The Lender shall be reasonably satisfied that the Borrower has executed that
certain Third Amendment to the Jefferies Credit Agreement.

(k) The Lender shall have received such other documents as the Lender or its
counsel may reasonably request.

Section 6.02 Each Credit Event. The obligation of the Lender to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

(a) At the time of and immediately after giving effect to the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.

(b) At the time of and immediately after giving effect to the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
event, development or condition that has or could reasonably be expected to have
a Material Adverse Effect shall have occurred.

(c) The representations and warranties of the Borrower set forth in this
Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, such representations and warranties
shall continue to be true and correct as of such specified earlier date.

(d) The issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, would not conflict with, or cause the Lender to violate or exceed,
any applicable Governmental Requirement, and no Change in Law shall have
occurred, and no litigation shall be pending or threatened, which does or, with
respect to any threatened litigation, seeks to, enjoin, prohibit or restrain,
the issuance, amendment, renewal, extension or repayment of any Letter of Credit
or any participations therein or the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

 

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(e) The receipt by the Lender of a request for a Letter of Credit in accordance
with Section 2.02.

(f) Each issuance, amendment, renewal or extension of any Letter of Credit shall
be deemed to constitute a representation and warranty by the Borrower on the
date thereof as to the matters specified in Section 6.02(a) through (e).

ARTICLE VII

Representations and Warranties

The Borrower represents and warrants to the Lender that:

Section 7.01 Organization; Powers. The Borrower is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to own
its assets and to carry on its business as now conducted, and is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.

Section 7.02 Authority; Enforceability. The Transactions to be entered into by
each Loan Party are within such Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action
(including, without limitation, any action required to be taken by any class of
directors of such Loan Party or any other Person, whether interested or
disinterested, in order to ensure the due authorization of the Transactions).
Each Loan Document to which any Loan Party is a party has been duly executed and
delivered by such Loan Party and constitutes a legal, valid and binding
obligation of such Loan Party enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

Section 7.03 Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any other third Person (including shareholders or any
class of directors, whether interested or disinterested, of any Loan Party or
any other Person), nor is any such consent, approval, registration, filing or
other action necessary for the validity or enforceability of any Loan Document
or the consummation of the transactions contemplated thereby, except such as
have been obtained or made and are in full force and effect other than (i) the
recording and filing of the Security Instruments as required by this Agreement
and (ii) those third party approvals or consents which, if not made or obtained,
would not cause a Default hereunder, could not reasonably be expected to have a
Material Adverse Effect or do not have an adverse effect on the enforceability
of the Loan Documents, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of the Borrower or any
Subsidiary or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Borrower or any Subsidiary or its Properties, or give rise to a right
thereunder to require any payment to be made by the Borrower or such Subsidiary
and (d) will not result in the creation or imposition of any Lien on any
Property of the Borrower or any Subsidiary (other than the Liens created by the
Loan Documents).

Section 7.04 Financial Condition; No Material Adverse Change.

(a) The Borrower has heretofore furnished to the Lender its (i) audited
consolidated balance sheet and statement of income, stockholders equity and cash
flows as of and for the fiscal year ended December 31, 2011, all reported on by
a firm of independent public accountants acceptable to the Lender and
(ii) unaudited consolidated balance sheet and statements of income, stockholders
equity and cash flows as of and for the fiscal quarter and the portion of the
fiscal year ended September 30, 2012, certified by a Financial Officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP,

 

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subject to year-end audit adjustments and the absence of footnotes in the case
of the unaudited quarterly financial statements.

(b) Since December 31, 2011, (i) there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect and (ii) the business of the Borrower and its Subsidiaries has
been conducted only in the ordinary course consistent with past business
practices.

Section 7.05 Litigation; ERISA Events. There are no actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened in
writing against or affecting the Borrower or any Subsidiary (i) as to which
there is a reasonable possibility of an adverse determination that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve any Loan Document or
the Transactions. No ERISA Event has occurred or is reasonably expected to
occur.

Section 7.06 Compliance with the Laws and Agreements; No Defaults. Each of the
Borrower and each Subsidiary is in compliance with all Governmental Requirements
(including without limitation, Environmental Laws) applicable to it or its
Property and all agreements and other instruments binding upon it or its
Property, and possesses all licenses, permits, franchises, exemptions, approvals
and other governmental authorizations necessary for the ownership of its
Property and the conduct of its business, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. Neither the Borrower nor any Subsidiary is in default
nor has any event or circumstance occurred which, but for the expiration of any
applicable grace period or the giving of notice, or both, would constitute a
default or would require the Borrower or a Subsidiary to Redeem or make any
offer to Redeem under any indenture, note, credit agreement or instrument
pursuant to which any Material Indebtedness is outstanding or by which the
Borrower or any Subsidiary or any of their Properties is bound. No Default has
occurred and is continuing.

Section 7.07 Investment Company Act. Neither the Borrower nor any Subsidiary is
an “investment company” or a company “controlled” by an “investment company,”
within the meaning of, or subject to regulation under, the Investment Company
Act of 1940, as amended.

Section 7.08 Taxes. Each of the Borrower and its Subsidiaries has timely filed
or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves in accordance with GAAP or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of Taxes and other governmental charges
are, in the reasonable opinion of the Borrower, adequate. No Tax Lien relating
to Taxes described in the first sentence of this Section 7.08 has been filed
and, to the knowledge of the Borrower, no claim is being asserted with respect
to any such Tax or other such governmental charge.

Section 7.09 Disclosure; No Material Misstatements. The Borrower has disclosed
to the Lender all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. To the knowledge of Borrower, taken as a
whole, none of the other reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower or any Subsidiary to the
Lender or any of its Affiliates in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or under any other
Loan Document (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, prospect information, geological and
geophysical data and engineering projections, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

Section 7.10 Insurance. The Borrower has, and has caused all its Subsidiaries to
have, (a) all insurance policies sufficient for the compliance by each of them
with all material Governmental Requirements and all material agreements and
(b) insurance coverage in at least amounts and against such risk (including,
without

 

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limitation, public liability) that are usually insured against by companies
similarly situated and engaged in the same or a similar business for the assets
and operations of the Borrower and its Subsidiaries.

Section 7.11 Location of Business and Offices. The Borrower’s jurisdiction of
organization is Delaware; the name of the Borrower as listed in the public
records of Delaware is Par Petroleum Corporation; and the organizational
identification number of the Borrower in Delaware is 4042296.

Section 7.12 Use Letters of Credit. The Letters of Credit shall be used to
backstop the existing letters of credit issued by SEACOR’s Holdings Inc. It is
further anticipated that that additional Letters of Credit will be issued in
furtherance of Borrower’s and its Subsidiaries’ business. The Borrower and its
Subsidiaries are not engaged principally, or as one of its or their important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock (within
the meaning of Regulation T, U or X of the Board). No part of the proceeds of
any Letter of Credit will be used for any purpose which violates the provisions
of Regulations T, U or X of the Board.

Section 7.13 Solvency. Before and after giving effect to the Transactions,
(a) the aggregate assets, at a fair valuation, of the Borrower and its
Subsidiaries, taken as a whole, will exceed the aggregate Debt of the Borrower
on a consolidated basis, as the Debt becomes absolute and matures, (b) none of
the Borrower nor any Subsidiary will have incurred or intended to incur, and
will not believe that it will incur, Debt beyond its ability to pay such Debt as
such Debt becomes absolute and matures and (c) none of the Borrower nor any
Subsidiary will have (nor will have any reason to believe that it will have
thereafter) unreasonably small capital for the conduct of its business.

ARTICLE VIII

Affirmative Covenants

Until the Commitments have expired or been terminated and all fees payable
hereunder and all other amounts payable under the Loan Documents shall have been
paid in full and all Letters of Credit shall have expired or terminated and all
LC Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lender that:

Section 8.01 Financial Statements; Other Information. The Borrower will furnish
to the Lender the financial statements and other material required under the
Letter of Credit Applications within the time periods required thereunder. The
Borrower will furnish to the Lender copies of any financial statements, notices
of default of events of default, or any requested waivers furnished to the
lenders under the Jeffries Credit Agreement, contemporaneously with the
transmittals thereunder. Promptly following any request therefor, the Borrower
will furnish such other information regarding the operations, business affairs
and financial condition of the Borrower or compliance with the terms of this
Agreement or any other Loan Document, as the Lender may reasonably request.

Section 8.02 Notices of Material Events. The Borrower will furnish to the Lender
prompt written notice of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of, or the threat in writing of, any action,
suit, proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against the Borrower or any Affiliate thereof not
previously disclosed in writing to the Lender or any material adverse
development in any action, suit, proceeding, investigation or arbitration
previously disclosed to the Lender that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect; and

 

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(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 8.03 Existence; Conduct of Business. The Borrower will, and will cause
each Subsidiary to, do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business and maintain, if necessary, its qualification to do business in each
jurisdiction in which the ownership of its Properties requires such
qualification, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 9.05.

Section 8.04 Payment of Obligations. The Borrower will, and will cause each
Subsidiary to, pay its obligations, including Tax liabilities of the Borrower
and all of its Subsidiaries before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings and the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP or (b) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect or result in the
seizure or levy of any material Property of the Borrower or any Subsidiary.

Section 8.05 Performance of Obligations under Loan Documents. The Borrower will
do and perform every act and discharge all of the obligations to be performed
and discharged by them under the Loan Documents, including, without limitation,
this Agreement, at the time or times and in the manner specified.

Section 8.06 Books and Records; Inspection Rights. The Borrower will, and will
cause each Subsidiary to, keep proper books of record and account in which full,
true and correct entries are made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each
Subsidiary to, permit any representatives designated by the Lender, upon
reasonable prior notice, to visit and inspect its Properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times during normal business hours and as often as reasonably
requested on an individual and aggregate basis.

Section 8.07 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws (including Environmental Laws), rules,
regulations and orders of any Governmental Authority applicable to it or its
Property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

Section 8.08 Further Assurances. The Borrower at its expense will promptly
execute and deliver to the Lender all such other documents, agreements and
instruments reasonably requested by the Lender to comply with, cure any defects
or accomplish the conditions precedent, covenants and agreements of the Borrower
or any Subsidiary, as the case may be, in the Loan Documents, or to further
evidence and more fully describe the cash collateral intended as security for
the Obligations, or to correct any omissions in this Agreement or the Security
Instruments, or to state more fully the obligations secured therein, or to
perfect, protect or preserve any Liens created pursuant to this Agreement or any
of the Security Instruments or the priority thereof, or to make any recordings,
file any notices or obtain any consents, all as may be reasonably necessary or
appropriate, in the sole discretion of the Lender, in connection therewith.

Section 8.09 ERISA Compliance. In addition to and without limiting the
generality of Section 8.04, the Borrower shall and shall cause each of its
Subsidiaries to (a) comply in all material respects with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all employee benefit plans (as defined in ERISA), (b) not take
any action or fail to take action the result of which could be (i) a liability
to the PBGC (other than liability for PBGC premiums) or (ii) a past due
liability to any Multiemployer Plan, (c) not participate in any prohibited
transaction that could result in any material civil penalty

 

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under ERISA or any tax under the Code, (d) operate each employee benefit plan in
such a manner that will not incur any material tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in
Section 4980B of the Code except to the extent such failure to comply could not
reasonably be expected to have Material Adverse Effect and (e) furnish to the
Lender upon request such additional information about any employee benefit plan
as may be reasonably requested by the Lender.

Section 8.10 Establishment and Maintenance of Accounts; Cash Collateral.

(a) On or before the Effective Date, the Borrower shall establish and maintain a
Cash Collateral Account with the Lender. The Borrower shall at all times
maintain a balance in the Cash Collateral Account that achieves Complete
Collateral Compliance; provided that, the Borrower shall make and maintain an
initial deposit into the Cash Collateral Account equal to at least $19,000,000
on the Effective Date and continuing until January 11, 2013 (unless the
Borrower’s acquisition of equity interests of SEACOR Energy, Inc. does not close
on December 31, 2012, in which case the initial Letter of Credit to be issued to
SEACOR Holdings, Inc. shall be returned to Lender for cancellation and the
initial deposit of $19,000,000, less any fees or expenses, can thereafter be
returned to the Borrower so long as Complete Collateral Compliance exists).

(b) In connection with the cancellation, expiration, termination of or reduction
in value of a Letter of Credit, or after January 11, 2013 with respect to the
initial deposit referenced in preceding clause (a), the Borrower may submit a
request to withdraw collateral in the form attached hereto as Exhibit C,
requesting that the Lender approve a release of cash in the Cash Collateral
Account securing such Letter of Credit, so long as Complete Collateral
Compliance exists and would exist after giving effect to such release and in
such event Lender shall promptly approve such release.

ARTICLE IX

Negative Covenants

Until the Commitments have expired or terminated and all fees payable hereunder
and all other amounts payable under the Loan Documents have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lender
that:

Section 9.01 Debt. The Borrower will not, and will not permit any Subsidiary to,
incur, create, assume or suffer to exist any Debt, except:

(a) the Notes or other Obligations arising under the Loan Documents.

(b) Debt arising under or permitted under the Jefferies Credit Agreement.

Section 9.02 Liens. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:

(a) Liens securing the payment of any Obligations.

(b) Liens arising under or permitted under the Jefferies Credit Agreement.

Section 9.03 Investments, Loans and Advances. The Borrower will not, and will
not permit any Subsidiary to, make or permit to remain outstanding any
Investments in or to any Person, except as permitted under the Jefferies Credit
Agreement.

 

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Section 9.04 Nature of Business. The Borrower will not, and will not permit any
Subsidiary to, allow any material change to be made in the character of its
business as an independent oil and gas exploration and production company with
midstream, marketing and trading components.

Section 9.05 Mergers, Etc. Neither the Borrower nor any Subsidiary will merge
into or with or consolidate with any other Person, or sell, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its Property to any other Person (any such transaction, a
“consolidation”); provided that (a) any Subsidiary may participate in a
consolidation with the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or any Subsidiary (provided that such
Subsidiary shall be the continuing or surviving Person) (b) any Subsidiary may
be a party to a merger, consolidation or disposition permitted under the
Jefferies Credit Agreement and (b) in the case of an Subsidiary merging into
Borrower, no Default or Event of Default shall result.

Section 9.06 Negative Pledge Agreements. The Borrower will not create, incur,
assume or suffer to exist any contract, agreement or understanding which in any
way prohibits or restricts the granting, conveying, creation or imposition of
any Lien on any of its Cash Collateral Account in favor of the Lender; provided,
however, that the preceding restrictions will not apply to encumbrances or
restrictions arising under or by reason of (a) this Agreement or the Security
Instruments (b) the Jeffries Credit Agreement and (c) applicable law, rule,
regulation or order.

Section 9.07 Proceeds of Letters of Credit. No Loan Party has taken or will take
any action which might cause any of the Loan Documents to violate Regulations T,
U or X or any rule or regulation thereunder, in each case as now in effect or as
the same may hereinafter be in effect. If requested by the Lender, the Borrower
will furnish to the Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 or such other form referred to in
Regulations U, T or X of the Board, as the case may be.

ARTICLE X

Events of Default; Remedies

Section 10.01 Events of Default. One or more of the following events shall
constitute an “Event of Default”:

(a) the Borrower shall fail to pay any reimbursement obligation in respect of
any LC Disbursement that is not otherwise reimbursed from the Cash Collateral
Account or any fee or other amount when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof, by acceleration or otherwise.

(b) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with any Loan Document or any
amendment or modification of any Loan Document or waiver under such Loan
Document, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
when made or deemed made in any material respect.

(c) the Borrower or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section 8.01, Section 8.02,
Section 8.03 or ARTICLE IX.

(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in
Section 10.01(a) or Section 10.01(c)) or any other Loan Document, and such
failure shall continue unremedied for a period of thirty (30) days after the
earlier to occur of (i) notice thereof from the Lender to the Borrower (which
notice will be given at the request of any Lender) or (ii) a Responsible Officer
of the Borrower or such Subsidiary otherwise becoming aware of such default.

(e) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or of a

 

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substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered.

(f) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in Section 10.01(e), (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) take any action for the purpose of effecting any of the
foregoing or (vii) shall become unable, admit in writing its inability, or fail
generally to pay its debts as they become due.

(g) the Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof, cease to be in full force and effect
and valid, binding and enforceable in accordance with their terms against the
Borrower or shall be repudiated, or cease to create a valid and perfected Lien
of the priority required thereby on any of the collateral purported to be
covered thereby, except to the extent permitted by the terms of this Agreement,
or the Borrower or any Subsidiary or any of their Affiliates shall so state in
writing.

(h) any event shall have occurred that, in the opinion of the Lender, could
reasonably be expected to result in a Material Adverse Effect.

(i) the Borrower or any Subsidiary (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Debt under the Jefferies Credit Agreement or any
Material Indebtedness, or (B) fails to observe or perform any other agreement or
condition relating to any such Debt under the Jefferies Credit Agreement or any
Material Indebtedness, or any other event or default occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such
Debt to cause, with the giving of notice if required, such Debt to be demanded
or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Debt to be made, prior to its stated maturity, or to become payable
or cash collateral in respect thereof to be demanded.

Section 10.02 Remedies.

(a) In the case of an Event of Default other than one described in
Section 10.01(e), or Section 10.01(f), at any time thereafter during the
continuance of such Event of Default, the Lender may, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Note to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon all fees and other
obligations of the Borrower accrued hereunder and under the Note and the other
Loan Documents, shall become due and payable immediately, without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
notice of any kind, all of which are hereby waived by the Borrower; and in case
of an Event of Default described in Section 10.01(e) or Section 10.01(f), the
Commitments shall automatically terminate and the Note, together with accrued
interest thereon and all fees and the other obligations of the Borrower accrued
hereunder and under the other Loan Documents, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower.

(b) In the case of the occurrence of an Event of Default, the Lender will have
all other rights and remedies available at law and equity.

(c) All proceeds realized from the liquidation or other disposition of
collateral or otherwise received after maturity of the Note, whether by
acceleration or otherwise, shall be applied: first, to reimbursement of

 

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expenses and indemnities provided for in this Agreement and the Security
Instruments; second, to fees; third, pro rata to Obligations referred to in
Clause (b) of the definition of Obligations owing to a Lender or an Affiliate of
a Lender; fourth, to any other Obligations; fifth, any excess shall be paid to
the Borrower or as otherwise required by any Governmental Requirement.

ARTICLE XI

Miscellaneous

Section 11.01 Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone (and subject to Section 11.01(b)), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

(i) if to the Borrower, to it at Par Petroleum Corporation, 1301 McKinney, Suite
2025, Houston, Texas 77010, Attention John T. Young (Telecopy No.
(713) 650-0502), with a copy to Porter Hedges LLP, 1000 Main Street, 36th Floor
, Attention: James Cowen (Telecopy No. (713) 226-6249); and

(ii) if to the Lender, to it at Compass Bank, 24 Greenway Plaza, Suite 1601,
Houston, Texas, 77046, Attention Eric Appel (Telecopy No. (713) 966-2388, with a
copy to Duane Morris LLP, 1330 Post Oak Boulevard, Suite 800, Houston, Texas
77056, Attention Charles E. Harrell (Telecopy No. (713) 402-3901).

(b) Notices and other communications to the Lender hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Lender. The Lender or the Borrower may, in their discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

Section 11.02 Waivers; Amendments.

(a) No failure on the part of the Lender to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege, or any
abandonment or discontinuance of steps to enforce such right, power or
privilege, under any of the Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
any of the Loan Documents preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies of the
Lender hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by Section 11.02(b), and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Lender may have had notice or knowledge of such Default at the
time.

(b) Neither this Agreement nor any provision hereof nor any Security Instrument
nor any provision thereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Lender.

 

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Section 11.03 Expenses, Indemnity; Damage Waiver.

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Lender and its Affiliates, including, without limitation, the reasonable
fees, charges and disbursements of counsel and other outside consultants for the
Lender, the reasonable travel, photocopy, mailing, courier, telephone and other
similar expenses, and the cost of environmental audits and surveys and
appraisals, in connection with the syndication of the credit facilities provided
for herein, the preparation, negotiation, execution, delivery and administration
(both before and after the execution hereof and including advice of counsel to
the Lender as to the rights and duties of the Lender with respect thereto) of
this Agreement and the other Loan Documents and any amendments, modifications or
waivers of or consents related to the provisions hereof or thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated),
(ii) all costs, expenses, Taxes, assessments and other charges incurred by the
Lender in connection with any filing, registration, recording or perfection of
any security interest contemplated by this Agreement or any Security Instrument
or any other document referred to therein, (iii) all reasonable out-of-pocket
expenses incurred by the Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iv) all out-of-pocket expenses incurred by the Lender, including
the reasonable fees, charges and disbursements of any outside counsel for the
Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 11.03, or in connection with the Letters of Credit issued
hereunder, including, without limitation, all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Letters of Credit.

(b) The Borrower shall indemnify the Lender and each Related Party of any of the
foregoing persons (each such person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto or the parties to any other Loan Document of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or by any other Loan Document, (ii) the failure of the
Borrower to comply with the terms of any Loan Document, including this
Agreement, or with any Governmental Requirement, (iii) any inaccuracy of any
representation or any breach of any warranty or covenant of the Borrower set
forth in any of the Loan Documents or any instruments, documents or
certifications delivered in connection therewith, (iv) any loan or Letter of
Credit or the use of the proceeds therefrom, including, without limitation,
(A) any refusal by Lender to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit, or (B) the payment of a drawing under
any Letter of Credit notwithstanding the non-compliance, non-delivery or other
improper presentation of the documents presented in connection therewith,
(v) the operations of the business of the Borrower by the Borrower, (vi) any
assertion that the Lender was not entitled to receive the proceeds received
pursuant to the Security Instruments, (vii) any Environmental Law applicable to
the Borrower or any Subsidiary or any of their properties, including without
limitation, the presence, generation, storage, release, threatened release, use,
transport, disposal, arrangement of disposal or treatment of oil, oil and gas
wastes, solid wastes or hazardous substances on any of their properties,
(viii) the breach or non-compliance by the Borrower or any Subsidiary with any
Environmental Law applicable to the Borrower or any Subsidiary, (ix) the past
ownership by the Borrower or any Subsidiary of any of their properties or past
activity on any of their properties which, though lawful and fully permissible
at the time, could result in present liability, (x) the presence, use, release,
storage, treatment, disposal, generation, threatened release, transport,
arrangement for transport or arrangement for disposal of oil, oil and gas
wastes, solid wastes or hazardous substances on or at any of the properties
owned or operated by the Borrower or any Subsidiary or any actual or alleged
presence or release of hazardous materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, (xi) any environmental
liability related in any way to the Borrower or any of its Subsidiaries, or
(xii) any other environmental, health or safety condition in connection with the
Loan Documents, or (xiii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any indemnitee is a
party thereto, and such Indemnity shall extend to each Indemnitee
notwithstanding the sole or concurrent negligence of every kind or character
whatsoever, whether active or passive, whether an affirmative act or an
omission, including

 

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without limitation, all types of negligent conduct identified in the restatement
(second) of torts of one or more of the Indemnitees or by reason of strict
liability imposed without fault on any one or more of the Indemnitees; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (a) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee, (b) relate to agreements, or obligations to which Borrower and
its subsidiaries are not parties, (c) relate to claims between or among any of
the lenders, the agent or any of their shareholders, partners or members, or
(d) relate to laws, rules or regulations affecting the lenders or the agent and
not the borrower or the subsidiaries, or (e) in respect of any property for any
occurrence arising from the acts or omissions of the agent or any lender during
the period after which such person, its successors or assigns shall have
obtained possession of such property (whether by foreclosure or deed in lieu of
foreclosure, as mortgagee-in-possession or otherwise).

(c) To the extent permitted by applicable law, the Borrower and the Indemnified
Parties shall not assert, and hereby waive, any claim against each other, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the Transactions, any Letter of
Credit or the use of the proceeds thereof.

(d) All amounts due under this Section 11.03 shall be payable promptly after
written demand therefor.

Section 11.04 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of Lender), except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of lender), Participants (to the
extent provided in Section 11.04(c)) and, to the extent expressly contemplated
hereby, the Related Parties of the Lender) any legal or equitable right, remedy
or claim under or by reason of this Agreement.

(b) The Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment at the time owing to it) without the prior written consent of the
Borrower.

(c) (i) The Lender may, without the consent of the Borrower, sell participations
to one or more banks or other entities (a “Participant”) in all or a portion of
the Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment owing to it); provided that (1) the Lender’s
obligations under this Agreement shall remain unchanged, (2) the Lender shall
remain solely responsible to the Borrower hereto for the performance of such
obligations and (3) the Borrower shall continue to deal solely and directly with
the Lender in connection with the Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which the Lender sells such a
participation shall provide that the Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the proviso to
Section 11.02 that affects such Participant. In addition such agreement must
provide that the Participant be bound by the provisions of Section 11.03.
Subject to Section 11.04(c)(ii), the Borrower agrees that each Participant shall
be entitled to the benefits of Section 5.01 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 11.04(b).
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 12.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 4.01(c) as though it were a Lender.

 

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(ii) A Participant shall not be entitled to receive any greater payment under
Section 5.01 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.

Section 11.05 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as any Letters of Credit shall be outstanding or any fee or any other
amount payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Section 5.01 and
Section 11.03 and ARTICLE XI shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement, any other Loan
Document or any provision hereof or thereof.

(b) To the extent that any payments on the Obligations or proceeds of any
collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Lender’s Liens, security interests, rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and effect. In
such event, each Loan Document shall be automatically reinstated and the
Borrower shall take such action as may be reasonably requested by the Lender to
effect such reinstatement.

Section 11.06 Counterparts; Integration; Effectiveness.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.

(b) This Agreement, the other Loan Documents and any separate letter agreements
with respect to fees payable to the Lender constitute the entire contract among
the parties relating to the subject matter hereof and thereof and supersede any
and all previous agreements and understandings, oral or written, relating to the
subject matter hereof and thereof. This Agreement and the other Loan Documents
represent the final agreement among the parties hereto and thereto and may not
be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.

(c) Except as provided in Section 6.01(a), this Agreement shall become effective
when it shall have been executed by the Lender and when the Lender shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

 

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Section 11.07 Severability. Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 11.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by the Lender
or Affiliate to or for the credit or the account of the Borrower against any of
and all the obligations of the Borrower owed to such Lender now or hereafter
existing under this Agreement or any other Loan Document, irrespective of
whether or not the Lender shall have made any demand under this Agreement or any
other Loan Document and although such obligations may be unmatured. The rights
of the Lender under this Section 11.08 are in addition to other rights and
remedies (including other rights of setoff) which such Lender or its Affiliates
may have.

Section 11.09 Governing Law; Jurisdiction; Consent to Service of Process. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Texas. Any legal action or proceeding with respect to the Loan
Documents shall be brought in the courts of the State of Texas sitting in Harris
County and of the United States District Court of the Southern District of
Texas, and, by execution and delivery of this Agreement, each party hereby
accepts for itself and (to the extent permitted by law) in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each party hereby irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions. This submission to
jurisdiction is non-exclusive and does not preclude a party from obtaining
jurisdiction over another party in any court otherwise having jurisdiction. Each
party irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the address
specified in Section 11.01 or such other address as is specified pursuant to
Section 11.01 (or its assignment and assumption), such service to become
effective thirty (30) days after such mailing. Nothing herein shall affect the
right of a party or any holder of a note to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
another party in any other jurisdiction. Each party hereby (i) irrevocably and
unconditionally waives, to the fullest extent permitted by law, trial by jury in
any legal action or proceeding relating to this Agreement or any other Loan
Document and for any counterclaim therein; (ii) irrevocably waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any such litigation any special, exemplary, punitive or consequential
damages, or damages other than, or in addition to, actual damages;
(iii) certifies that no party hereto nor any representative or agent of counsel
for any party hereto has represented, expressly or otherwise, or implied that
such party would not, in the event of litigation, seek to enforce the foregoing
waivers, and (iv) acknowledges that it has been induced to enter into this
Agreement, the Loan Documents and the transactions contemplated hereby and
thereby by, among other things, the mutual waivers and certifications contained
in this Section 11.09.

Section 11.10 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 11.11 No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lender to issue, amend, renew or extend
Letters of Credit hereunder are solely for the benefit of the Borrower, and no
other Person shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the Lender for any reason whatsoever.
There are no third party beneficiaries.

Section 11.12 US Patriot Act Notice. The Lender hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow the Lender to identify the Borrower in accordance with the
Patriot Act.

 

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Section 11.13 Interest Rate Limitation. Each provision in this Agreement and
each other Loan Document is expressly limited so that in no event whatsoever
shall the amount paid, or otherwise agreed to be paid, by the Borrower for the
use, forbearance or detention of the money to be loaned under this Agreement or
any other Loan Document or otherwise (including any sums paid as required by any
covenant or obligation contained herein or in any other Loan Document which is
for the use, forbearance or detention of such money), exceed that amount of
money which would cause the effective rate of interest thereon to exceed the
Highest Lawful Rate, and all amounts owed under this Agreement and each other
Loan Document shall be held to be subject to reduction to the effect that such
amounts so paid or agreed to be paid which are for the use, forbearance or
detention of money under this Agreement or such Loan Document shall in no event
exceed that amount of money which would cause the effective rate of interest
thereon to exceed the Highest Lawful Rate. To the extent that the Highest Lawful
Rate applicable to the Lender is at any time determined by Texas law, such rate
shall be the “weekly ceiling” described in the Texas Finance Code, Chapter 303,
as amended; provided, however, to the extent permitted by such Finance Code, the
Lender from time to time by notice to Borrower may revise the aforesaid election
of such interest rate ceiling as such ceiling affects the then-current or future
balances of the LC Disbursements. Notwithstanding any provision in this
Agreement or any other Loan Document to the contrary, if the maturity of the
obligations in respect of the other Loan Documents are accelerated for any
reason, or in the event of prepayment of all or any portion of the obligations
in respect of the other Loan Documents by the Borrower or in any other event,
earned interest on the LC Disbursements and such other obligations of the
Borrower may never exceed the maximum amount permitted by applicable law, and
any unearned interest otherwise payable under the obligations in respect of the
other Loan Documents that is in excess of the maximum amount permitted by
applicable law shall be cancelled automatically as of the date of such
acceleration or prepayment or other such event and, if theretofore paid, shall
be credited on the principal thereof or, if paid in full, refunded to the
Borrower. In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the Highest Lawful Rate, the Borrower and the
Lender shall, to the maximum extent permitted by applicable law, amortize,
prorate, allocate and spread, in equal parts during the period of the actual
term of this Agreement, all interest at any time contracted for, charged,
received or reserved in connection with the Loan Documents.

[REMAINDER OF PAGE IS INTENTIONALLY BLANK]

 

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

 

BORROWER: PAR PETROLEUM CORPORATION, a Delaware corporation By:   /s/ R. Seth
Bullock Name:   R. Seth Bullock Title:   Chief Financial Officer LENDER: COMPASS
BANK By:   /s/ Eric Appel Name:   Eric Appel Title:   Senior Vice President

 

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