EXHIBIT 10.2
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND
CONSENT AND ACKNOWLEDGEMENT
     This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT
AND ACKNOWLEDGEMENT (this “Amendment”) is dated as of January 24, 2006, and is
entered into by and among PARAMOUNT PETROLEUM CORPORATION, a Delaware
corporation (the “Borrower”), each of the financial institutions party to the
Restated Credit Agreement referenced below (collectively the “Lenders”), and
BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (the “Agent”).
     A. WHEREAS, the Borrower, the Agent, and the Lenders, among others, have
entered into that certain Amended and Restated Credit Agreement (as amended,
restated, or otherwise modified from time to time, the “Restated Credit
Agreement”), dated as of July 26, 2005; and
     B. WHEREAS, the Borrower has requested that the Agent and the Lenders amend
the Restated Credit Agreement to: (a) consent to the sale of certain of the
Borrower’s Collateral; and (b) amend the Restated Credit Agreement in other
respects, and the Agent and the Lenders have agreed to each of the foregoing
requests all on the terms and conditions set forth herein.
     NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Restated Credit Agreement and this Amendment, and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1 Definitions. Initially capitalized terms used but not otherwise
defined in this Amendment have the meanings given thereto in the Restated Credit
Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
     Section 2.1 New Definitions. The following new definitions are hereby added
to Annex A to the Restated Credit Agreement in proper alphabetical order to read
in their entirety as follows:
          “‘Amendment Date’ means December 30, 2005.”
     “‘Permitted Tidelands Sale’ means the sale by the Borrower of 100% of its
general partnership interest in Tidelands, provided, however, that each of the

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Tidelands Sale Conditions shall have been satisfied prior to or concurrently
therewith.”
     “‘Permitted Tidelands Sale Documents’ means any and all agreements,
instruments, and documents heretofore, now or hereafter evidencing or otherwise
relating to the Permitted Tidelands Sale or any aspect thereof, all of which
shall be in form and substance satisfactory to the Agent.”
     “‘Permitted Tidelands Sale Closing Date’ means the date on which the
Permitted Tidelands Sale closes pursuant to the terms and conditions of the
Permitted Tidelands Sale Documents.”
     “‘Pledge Agreement’ means that certain Pledge Agreement, dated as of
December 18, 2003, by and between the Borrower and the Agent.”
     “‘Tidelands’ means Tidelands Oil Production Company, a Texas general
partnership.”
     ““Tidelands Partnership Interest’ means all of the Borrower’s right, title
and interest in and to Tidelands.”
     “‘Tidelands Sale Conditions’ means all of the following conditions
precedent, all of which shall be in form and substance satisfactory to the
Agent:
     (a) The Borrower shall have delivered to the Agent an executed original of
each of the following agreements, documents or instruments, in each case, in
form and substance acceptable to the Agent:
          (i) The Purchase and Sale Agreement by, between and among the
Borrower, Chanse Long Beach Production Corporation, a Delaware corporation, OXY
Tidelands, Inc., a Delaware corporation, and OXY Wilmington, LLC, a Delaware
limited liability company, dated as of January ___, 2006, and all “Transaction
Documents” referred to in Section 3.4 therein.
          (ii) A certificate executed by the Secretary of the Borrower
certifying, on and as of the Permitted Tidelands Sale Closing Date, (A) that the
resolutions attached thereto, which authorize the execution, delivery and
performance by the Borrower of the Permitted Tidelands Sale Documents, have been
approved, adopted and ratified, (B) the names of the officers of the Borrower
authorized to sign the Permitted Tidelands Sale Documents to which the Borrower
is to be a party, (C) the specimen signatures of such officers, (D) that the
organizational document attached thereto is a true and correct copy of the
Borrower’s organizational document, (E) that the governing document attached
thereto is a true and correct copy of the Borrower’s governing document,
(F) that the certificates attached thereto evidence of the existence, good
standing, and foreign qualification of the Borrower in the jurisdiction in which
the Borrower is formed or

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transacts business and is required to qualify as a foreign corporation; and
(G) other matters;
          (iii) A certificate executed by the President and/or Chief Financial
Officer certifying, on and as of the Permitted Tidelands Sale Closing Date,
(A) that the representations and warranties contained herein, in the Restated
Credit Agreement, as amended hereby, and in all other Loan Documents, shall be
true and correct in all material respects as if made on and as of the Amendment
Date, except for such representations and warranties limited by their terms to a
specific date, (B) no Default or Event of Default shall have occurred and be
continuing, (C) the Borrower is in full compliance with all covenants and
agreements contained in the Restated Credit Agreement, as amended hereby, and
all other Loan Documents, and (D) other matters; and
          (iv) Each other agreement, document, or instrument reasonably
requested by the Agent in connection with the Permitted Tidelands Sale; and
     (b) The Permitted Tidelands Sale shall consist of the sale of 100% of the
Borrower’s equity interests in Tidelands for a purchase price as set forth in
the Permitted Tidelands Sale Documents, the proceeds of which shall be applied
by the Borrower to reduce the then outstanding Revolving Loans, all in
accordance with the conditions of this Amendment.”
     Section 2.2 Release of Tidelands Partnership Interest. The Agent and the
Lenders hereby consent to the sale of the Tidelands Partnership Interest upon
satisfaction of the Tidelands Sale Conditions. Notwithstanding anything to the
contrary herein, it is expressly agreed and understood that the Agent is not
releasing or discharging the Borrower from any of the following obligations:
(a) any Capital Stock pledged to the Agent pursuant to the Pledge Agreement,
other than the Tidelands Partnership Interest; or (b) any covenants, agreements,
liabilities, or obligations under the Pledge Agreement, the Restated Credit
Agreement, the Security Agreement, any Guaranty, or any of the other Loan
Documents, except with respect to the Tidelands Partnership Interest.
     Section 2.3 Amendment to Schedules. Schedule 6.5 of the Restated Credit
Agreement is hereby amended and restated in full by replacing it with
Schedule 6.5 attached to this Amendment.
ARTICLE III
CONDITIONS
     Section 3.1 Conditions Precedent. The effectiveness of this Amendment is
subject to the satisfaction of the following additional conditions precedent in
form and substance satisfactory to the Agent:

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     (a) The representations and warranties contained herein, in the Restated
Credit Agreement, as amended hereby, and in all other Loan Documents, shall be
true and correct in all material respects as of the Amendment Date as if made on
the Amendment Date, except for such representations and warranties limited by
their terms to a specific date;
     (b) No Default or Event of Default shall have occurred and be continuing;
     (c) The Borrower and each of the Lenders shall have delivered to the Agent
an executed original of each of the following agreements, documents or
instruments, in each case, in form and substance acceptable to the Agent:
          (i) This Amendment together with the Consents and Acknowledgements
attached hereto;
          (ii) A certificate executed by the Secretary of the Borrower
certifying (A) that the resolutions attached thereto which authorize the
execution, delivery and performance by the Borrower of this Amendment and the
other Loan Documents executed in connection herewith, have been approved,
adopted and ratified, (B) the names of the officers of the Borrower authorized
to sign this Amendment and each of the other Loan Documents executed in
connection herewith to which the Borrower is to be a party, (C) the specimen
signatures of such officers, (D) that the organizational document attached
thereto is a true and correct copy of the Borrower’s organizational document as
of the Amendment Date, (E) that the governing document attached thereto is a
true and correct copy of the Borrower’s governing document as of the Amendment
Date, (F) that the certificates attached thereto evidence the existence, good
standing, and foreign qualification of the Borrower in the jurisdiction in which
the Borrower is formed or transacts business and is required to qualify as a
foreign corporation as of the Amendment Date, and (G) other matters; and
          (iii) Each other agreement, document, or instrument reasonably
requested by the Agent in connection with this Amendment;
     (d) The Agent received from the Borrower an amended Schedule 6.5 to the
Restated Credit Agreement, in form and substance satisfactory to the Agent,
reflecting all information required to be set forth thereon by Section 6.5;
     (e) The Borrower shall have paid to the Agent all fees, costs, and expenses
owed to and/or incurred by the Agent arising in connection with this Amendment;
     (f) The Agent shall have received evidence satisfactory to it that the Term
Loan Agent and the Term Loan Lenders have consented to the terms and conditions
of this Amendment, to the Permitted Tidelands Sale, and to the Permitted
Tidelands Sale Documents and any and all documents relating to the release or
discharge of any

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Collateral or Person by the Term Loan Agent and the Term Loan Lenders in
connection with the Permitted Tidelands Sale or this Amendment;
     (g) The Agent shall have received such other documents, corporate
resolutions, corporate certificates, legal opinions and information, including,
without limitation, any third party consents, that the Agent shall require, each
in form and substance satisfactory to the Agent; and
     (h) All proceedings taken in connection with the transactions contemplated
by this Amendment and all documentation and other legal matters incident thereto
shall be satisfactory to the Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     Section 4.1 Representations and Warranties. The Borrower hereby represents
and warrants to the Agent, the Bank and the Lenders that, on and as of the
Amendment Date, (a) the execution, delivery, and performance of this Amendment
and all other Loan Documents executed and/or delivered in connection herewith
have been authorized by all requisite action on the part of the Borrower and
will not violate the articles of incorporation, articles of organization, bylaws
or operating agreement of the Borrower, (b) the representations and warranties
contained herein, in the Restated Credit Agreement, as amended hereby, and in
all other Loan Documents, are true and correct in all material respects as if
made on and as of the Amendment Date, except for such representations and
warranties limited by their terms to a specific date, (c) no Default or Event of
Default shall have occurred and be continuing, and (d) the Borrower is in full
compliance with all covenants and agreements contained in the Restated Credit
Agreement, as amended hereby, and all other Loan Documents.
ARTICLE V
MISCELLANEOUS
     Section 5.1 Acknowledgment of the Borrower. The Borrower hereby represents
and warrants that the execution and delivery of this Amendment and compliance by
the Borrower with all of the provisions of this Amendment: (a) are within the
powers and purposes of the Borrower; (b) have been duly authorized or approved
by the board of directors of the Borrower; and (c) when executed and delivered
by or on behalf of the Borrower will constitute valid and binding obligations of
the Borrower, enforceable in accordance with their terms. The Borrower reaffirms
its obligation to pay all amounts due to the Agent or the Lenders under the Loan
Documents in accordance with the terms thereof, as modified hereby. The Borrower
hereby represents and warrants to the Agent and the Lenders that any consent of
the Term Loan Lenders and of the Term Loan Agent required under the terms of
either the Amended and Restated Intercreditor Agreement or the Term Loan
Documents in order to consummate the transactions

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and amendments contemplated by this Amendment has been obtained and delivered to
the Agent, in form and substance satisfactory to the Agent, on or before the
Amendment Date.
     Section 5.2 Loan Documents Unmodified. Except as otherwise specifically
modified by this Amendment, all terms and provisions of the Restated Credit
Agreement and all other Loan Documents, as modified hereby, shall remain in full
force and effect. Nothing contained in this Amendment shall in any way impair
the validity or enforceability of the Loan Documents, as modified hereby, or
alter, waive, annul, vary, affect, or impair any provisions, conditions, or
covenants contained therein or any rights, powers, or remedies granted therein,
except as otherwise specifically provided in this Amendment. Subject to the
terms of this Amendment, any lien and/or security interest granted to the Agent,
for the benefit of the Lenders, in the Collateral set forth in the Loan
Documents shall remain unchanged and in full force and effect and the Restated
Credit Agreement and the other Loan Documents shall continue to secure the
payment and performance of all of the Obligations.
     Section 5.3 Parties, Successors and Assigns. This Amendment shall be
binding upon and shall inure to the benefit of the Borrower, the Agent, the
Lenders, and their respective successors and assigns.
     Section 5.4 Counterparts. This Amendment may be executed in one or more
counterparts and by telecopy, each of which when so executed shall be deemed to
be an original, but all of which when taken together shall constitute one and
the same instrument.
     Section 5.5 EFFECT OF WAIVER. NO CONSENT OR WAIVER, EXPRESS OR IMPLIED, BY
THE AGENT OR ANY LENDER TO OR OF ANY BREACH OF OR DEVIATION FROM ANY COVENANT,
DUTY, OR CONDITION SET FORTH IN THE RESTATED CREDIT AGREEMENT SHALL BE DEEMED A
CONSENT OR WAIVER TO OR OF ANY OTHER BREACH OF OR DEVIATION FROM THE SAME OR ANY
OTHER COVENANT, DUTY, OR CONDITION. NO FAILURE ON THE PART OF THE AGENT OR ANY
LENDER TO EXERCISE, NO DELAY IN EXERCISING, AND NO COURSE OF DEALING WITH
RESPECT TO, ANY RIGHT, POWER, OR PRIVILEGE UNDER THIS AMENDMENT, THE RESTATED
CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT SHALL OPERATE AS A WAIVER THEREOF,
NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY RIGHT, POWER, OR PRIVILEGE UNDER
THIS AMENDMENT, THE RESTATED CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT
PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER
RIGHT, POWER, OR PRIVILEGE. THE RIGHTS AND REMEDIES PROVIDED FOR IN THE RESTATED
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE CUMULATIVE AND NOT EXCLUSIVE
OF ANY RIGHTS AND REMEDIES PROVIDED BY LAW.
     Section 5.6 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only, are not a part of this Amendment, and shall
not affect the interpretation hereof.

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     Section 5.7 Expenses of Agent. Without limiting the terms and conditions of
the Loan Documents, the Borrower agrees to pay on demand: (a) all costs and
expenses incurred by the Agent in connection with the preparation, negotiation,
and execution of this Amendment and the other Loan Documents executed pursuant
hereto and any and all subsequent amendments, modifications, and supplements
hereto or thereto, including without limitation, the costs and fees of the
Agent’s legal counsel; and (b) all costs and expenses reasonably incurred by the
Agent in connection with the enforcement or preservation of any rights under the
Restated Credit Agreement, this Amendment, and/or the other Loan Documents,
including without limitation, the costs and fees of the Agent’s legal counsel
and the costs and fees associated with any environmental due diligence conducted
in relation hereto.
     Section 5.8 Choice of Law; Jury Trial Waiver. This Amendment shall be
governed by and construed according to the laws of the State of California
(without regard to conflicts of law principles thereof). EACH OF THE PARTIES
HERETO WAIVES ITS RIGHT TO A TRIAL BY JURY, IF ANY, IN ANY ACTION TO ENFORCE,
DEFEND, INTERPRET, OR OTHERWISE CONCERNING THIS AMENDMENT.
     Section 5.9 Total Agreement. This Amendment, the Restated Credit Agreement,
and all other Loan Documents shall constitute the entire agreement between the
parties relating to the subject matter hereof, and shall rescind all prior
agreements and understandings between the parties hereto relating to the subject
matter hereof, and shall not be changed or terminated orally.
[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment as of the day and year first written above.

                  “BORROWER”    
 
                PARAMOUNT PETROLEUM CORPORATION    
 
           
 
  By:   /s/ Craig H. Studwell    
 
           
 
  Name:   Craig H. Studwell    
 
  Title:   Senior Vice President    

 

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                  “AGENT”    
 
                BANK OF AMERICA, N.A., as the Agent    
 
           
 
  By:   /s/ Todd R. Eggertsen    
 
           
 
  Name:   Todd R. Eggertsen    
 
  Title:   Vice President    

 

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                  “BANK”    
 
                BANK OF AMERICA, N.A., as the Bank    
 
           
 
  By:   /s/ Todd R. Eggertsen    
 
           
 
  Name:   Todd R. Eggertsen    
 
  Title:   Vice President    

 

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                  “LENDERS”    
 
                BANK OF AMERICA, N.A., as a Lender    
 
           
 
  By:   /s/ Todd R. Eggertsen    
 
           
 
  Name:   Todd R. Eggertsen    
 
  Title:   Vice President    
 
                SOCIÉTÉ GÉNÉRALE, as a Lender    
 
           
 
  By:   /s/ Craig Tashjian    
 
           
 
  Name:   Craig Tashjian    
 
  Title:   Managing Director    
 
           
 
  By:   /s/ Andrea Servadio    
 
           
 
  Name:   Andrea Servadio    
 
  Title:   Associate    
 
                CITIBANK (WEST), FSB    
 
           
 
  By:   /s/ Hillary Savoie    
 
           
 
  Name:   Hillary Savoie    
 
  Title:   Vice President    
 
                BNP PARIBAS,
   as a Lender    
 
           
 
  By:   /s/ Sally Haswell    
 
           
 
  Name:   Sally Haswell    
 
  Title:   Managing Director    
 
           
 
  By:   /s/ Richard J. Wernli    
 
           
 
  Name:   Richard J. Wernli    
 
  Title:   Director    

 

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                  NATEXIS BANQUES POPULAIRES
as a Lender    
 
           
 
  By:   /s/ Simon Melchior    
 
           
 
  Name:   Simon Melchior    
 
  Title:   Assistant Vice President    
 
           
 
  By:   /s/ Vincent Lauras    
 
           
 
  Name:   Vincent Lauras    
 
  Title:   Managing Director    

 

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CONSENT AND ACKNOWLEDGEMENT
          Each of the undersigned acknowledges that its consent is not required,
but nevertheless does hereby consent to the foregoing Amendment. Each of the
undersigned hereby reaffirms its obligations under its Non-Recourse Suretyship
Agreement, Pledge Agreement, and all other documents executed by it in favor of
the Agent and/or the Lenders (collectively, the “Suretyship Agreements”), and
acknowledges and agrees that the Suretyship Agreements remain in full force and
effect and the Suretyship Agreements are hereby ratified and confirmed. The
signatures of the undersigned shall be fully effective even if other persons
named below fail to sign this acknowledgment. The failure to obtain the
signature of any of the undersigned shall not effect the obligations, under the
terms of the Suretyship Agreements, of the persons listed below, including but
not limited to the person who fails to sign.

         
 
  /s/ W. Scott Lovejoy
 
W. SCOTT LOVEJOY    
 
       
 
  /s/ Mark R. Milano    
 
       
 
  MARK R. MILANO    
 
       
 
  /s/ Jerrel C. Barto    
 
       
 
  Jerrel C. Barto, Trustee of the Jerrel C.
and Janice D. Barto Living Trust, u/d/t    
 
  dated March 18, 1991    
 
       
 
  /s/ Janice D. Barto    
 
       
 
  Janice D. Barto, Trustee of the Jerrel C.
and Janice D. Barto Living Trust, u/d/t    
 
  dated March 18, 1991    
 
       
 
  /s/ Craig C. Barto    
 
       
 
  Craig C. Barto, Trustee of the Craig C.Barto
and Gisele M. Barto Living Trust , u/d/t    
 
  dated April 5, 1991    
 
       
 
  /s/ Gisele M. Barto    
 
       
 
  Gisele M. Barto, Trustee of the Craig C. Barto
and Gisele M. Barto Living Trust, u/d/t    
 
  dated April 5, 1991    

 

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CONSENT AND ACKNOWLEDGEMENT
          Each of the undersigned acknowledges that its consent is not required,
but nevertheless does hereby consent to the foregoing Amendment. Each of the
undersigned hereby reaffirms its obligations under its Guaranty Agreement,
Security Agreement, Deed of Trust with Power of Sale, Assignment of Leases and
Rents, Security Agreement, Fixture Filing and Financing Statement, and all other
documents executed by it in favor of the Agent and/or the Lenders (collectively,
the “Guaranty Agreements”) and acknowledges and agrees that the Guaranty
Agreements remain in full force and effect and the Guaranty Agreements are
hereby ratified and confirmed. The signatures of the undersigned shall be fully
effective even if other persons named below fail to sign this acknowledgment.
The failure to obtain the signature of any of the undersigned shall not effect
the obligations, under the terms of the Guaranty Agreements, of the persons
listed below, including but not limited to the person who fails to sign.

                  Paramount of Oregon, Inc., an Oregon corporation    
 
           
 
  By:
Name:   /s/ Craig H. Studwell
 
Craig H. Studwell    
 
  Title:   Senior Vice President    
 
                Paramount of Washington, Inc., a Washington corporation    
 
           
 
  By:   /s/ Craig H. Studwell    
 
           
 
  Name:   Craig H. Studwell    
 
  Title:   Senior Vice President    
 
                Point Wells, LLC, a Washington limited
liability company    
 
           
 
  By:   /s/ Craig H. Studwell    
 
           
 
  Name:   Craig H. Studwell    
 
  Title:   Assistant Manager