EXHIBIT 10.6
FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
     This FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment”)
is dated as of June 22, 2006 (the “Fifth Amendment Closing Date”), and is
entered into by and among PARAMOUNT PETROLEUM CORPORATION, a Delaware
corporation (the “Borrower”), each of the financial institutions party to the
Credit Agreement referenced below (collectively the “Lenders”), BANK OF AMERICA,
N.A., as Administrative Agent for the Lenders (the “Agent”), BANK OF AMERICA,
N.A., as Bank, and Banc of America Securities LLC, solely in its capacity as
sole lead arranger and book manager (“BAS”).
     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 “Credit Agreement”),
dated as of July 26, 2005;
     WHEREAS, the Borrower has informed Agent that its shareholders have entered
into that certain Stock Purchase Agreement among the stockholders of Paramount
Petroleum Corporation and Alon USA Energy, Inc. (“Alon”) dated as of April 28,
2006 (as amended, the “Stock Purchase Agreement”);
     WHEREAS, contemporaneous with this Amendment, certain lenders, together
with Credit Suisse, acting through its Cayman Islands Branch, as the collateral
agent for such lenders (“CS”), will enter into a Credit Agreement to provide a
loan facility to Alon in an amount up to $550,000,000 (the “Alon Loan
Agreement”);
     WHEREAS, the Borrower has informed the Agent that it intends (a) to
guaranty the obligations of Alon under the Alon Loan Agreement under the terms
of that certain Guarantee and Collateral Agreement dated as of August 4, 2006
executed by the Borrower and the “Subsidiary Parties” (as defined therein) in
favor of CS (as amended, the “CS Guarantee and Collateral Agreement”), and (b)
to grant a Lien in favor of CS in certain assets of the Borrower and the
Subsidiary Parties (the “CS Lien”), in support of its obligations under the CS
Guarantee and Collateral Agreement. The CS Lien shall be co-extensive with the
Lien in existence immediately prior to the “Stock Purchase Closing Date” (as
defined below) in favor of Wells Fargo Bank Northwest, National Association, as
Term Loan Agent;
     WHEREAS, contemporaneous with the Stock Purchase Closing Date, Paramount
Petroleum Holdings, Inc., a Delaware corporation (“Holdings”) intends to make an
unsecured subordinated loan to the Borrower in the amount of $113,000,000 (the
“Subordinated Term Loan”), the proceeds of which will be used, in part, to repay
the Term Loan Debt existing immediately prior to the Stock Purchase Closing
Date; and
     WHEREAS, the Borrower has requested that Agent and Lenders consent to the
consummation of the Stock Purchase Agreement, the execution of the CS Guarantee
and Collateral Agreement, and the entering into of the Subordinated Term Loan
and to other waivers and amendments to the Credit Agreement. The Agent and the
Lenders have agreed to the foregoing requests but only on the terms and
conditions set forth below.
 

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     NOW, THEREFORE, the parties hereto do 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 Credit
Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
     Section 2.1 Amendments to Section 1.1. Section 1.1 of the Credit Agreement
is hereby amended and restated to read in its entirety as follows:
“1.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a credit facility of up to Two
Hundred Fifteen Million Dollars ($215,000,000) to the Borrower from time to time
during the term of this Agreement (the ‘Total Facility’). The Total Facility
shall be composed of a revolving line of credit consisting of Revolving Loans
and Letters of Credit described herein.”
     Section 2.2 Termination of Special Revolving Line of Credit and Second
Special Revolving Line of Credit. The Special Revolving Line of Credit and the
Second Special Revolving Line of Credit are hereby terminated and
Sections 1.2(j) and (k) of the Credit Agreement are hereby deleted in their
entirety.
     Section 2.3 Transactions with Affiliates. Section 7.15 of the Credit
Agreement is hereby amended by deleting the last sentence of Section 7.15 and
substituting therefor the following:
“Notwithstanding the foregoing, while no Event of Default has occurred and is
continuing, the Borrower and its Subsidiaries may (a) engage in transactions
with Affiliates in the ordinary course of business consistent with past
practices, in amounts and upon terms fully disclosed to the Agent and the
Lenders, and no less favorable to the Borrower and its Subsidiaries than would
be obtained in comparable arm’s-length transactions with a third party who is
not an Affiliate and (b) make payments to an Affiliate to the extent any such
payment is either a Permitted Payment or is otherwise permitted under the terms
of the Subordinated Term Loan Intercreditor Agreement.”
     Section 2.4 Events of Default. Section 9.1 of the Credit Agreement titled
“Events of Default” is hereby amended as follows:
(a) Clause (j) of Section 9.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
 

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          “(j) any Loan Document, including the CS Intercreditor Agreement or
the Subordinated Term Loan Subordination Agreement, shall be terminated, revoked
or declared void or invalid or unenforceable or challenged or breached by the
Borrower, any other obligor or any other party to a Loan Document (other than
the Agent or any Lender); provided, however, that the termination of the CS
Intercreditor Agreement or Subordinated Term Loan Subordination Agreement
resulting from the release of the CS Guarantee and Collateral Agreement or the
payment in full of the Subordinated Term Loan Debt, respectively, shall not be
an Event of Default hereunder or under any other Loan Document;
     (b) A new clause (s) is hereby added to Section 9.1 of the Credit Agreement
to read in its entirety as follows:
          “ (s) (i) there occurs an “Event of Default” as defined in the
Subordinated Term Loan Documents or (ii) there occurs under the Alon Loan
Documents (a) one or more monetary “Event(s) of Default” (as defined in the Alon
Loan Documents) in the amount of $40,000,000 or more either individually for any
single Event of Default or in the aggregate for all such monetary Events of
Default, or (b) a non monetary Event of Default, in each case under (a) and
(b) of this clause (s), unless and until each such Event of Default has either
been waived in writing in accordance with the requirements of the Alon Loan
Documents or such Event(s) of Default has been cured to the extent permitted by,
and in compliance with, the terms of the Alon Loan Documents.
     Section 2.5 New Definitions. The following new definitions are hereby added
to Annex A to the Credit Agreement in proper alphabetical order to read in their
entirety as follows:
“ ‘Alon’ means Alon USA Energy, Inc.”
“ ‘Alon Loan Agreement’ means that certain Credit Agreement dated as of June
___, 2006 and executed by and among certain financial institutions party thereto
from time to time, Credit Suisse, acting through its Cayman Islands Branch, as
Collateral Agent and Alon.”
“ ‘Alon Loan Documents’ means, collectively, the Alon Loan Agreement and all
other agreements, instruments, and documents evidencing, securing, guaranteeing,
or otherwise relating to the transactions contemplated by the Alon Loan
Agreement.”
“ ‘BAS’ means Banc of America Securities LLC.”
“ ‘Closing Expenses’ has the meaning set forth in the Fifth Amendment to Amended
and Restated Credit Agreement dated as of June 22, 2006 by and among the Agent,
the Lenders and the Borrower.”
 

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“ ‘CS’ means Credit Suisse, acting through its Cayman Islands Branch, as
Collateral Agent, under the Alon Loan Agreement .”
“ ‘CS Guarantee and Collateral Agreement’ means that certain Guaranty and
Collateral Agreement dated as of August 4, 2006 by the Borrower and certain of
its Subsidiaries in favor of CS.”
“ ‘CS Intercreditor Agreement’ means that certain Intercreditor Agreement dated
as of August 4, 2006 by and between the Agent and CS. The CS Intercreditor
Agreement is a Loan Document.”
“ ‘Holdings’ means Paramount Petroleum Holdings, Inc., a Delaware corporation.”
“ ‘Subordinated Term Loan’ means the term loan in the aggregate amount not to
exceed One Hundred Thirteen Million Dollars ($113,000,000), made by Holdings to
the Borrower subject to the Subordinated Term Loan Subordination Agreement.”
“ ‘Subordinated Term Loan Debt’ means the indebtedness and liabilities of the
Borrower under the Subordinated Term Loan Documents.”
“ ‘Subordinated Term Loan Documents’ means, collectively, the documents in form
and substance satisfactory to the Agent, from time to time evidencing, securing
and otherwise relating to the Subordinated Term Loan.”
“ ‘Subordinated Term Loan Subordination Agreement’ means the Subordination
Agreement dated as of August 4, 2006 by and between the Agent and Holdings. The
Subordinated Term Loan Subordination Agreement is a Loan Document.”
     Section 2.6 Amended Definitions.
     (a) Permitted Payments. A new clause “(f)” is hereby added to the
definition of “Permitted Payments” to read in its entirety as follows:
     “ (f) such payment is not otherwise prohibited under the terms of the
Subordinated Term Loan Subordination Agreement.”
     (b) Restated Definitions. Each of the following definitions contained in
Annex A to the Credit Agreement is hereby amended and restated in its entirety
to read, respectively, as follows:
“ ‘Aggregate Revolver Outstandings’ means, at any date of determination: the sum
of: (a) the unpaid balance of Revolving Loans; (b) the aggregate amount of
Pending Revolving Loans; (c) one hundred percent (100%) of the aggregate undrawn
face amount of all outstanding
     

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Letters of Credit; and (d) the aggregate amount of any unpaid reimbursement
obligations in respect of Letters of Credit.”
“ ‘Borrowing’ means a borrowing hereunder consisting of Revolving Loans made on
the same day by the Lenders to the Borrower, or by Bank in the case of a
Borrowing funded by Non-Ratable Loans, or by the Agent in the case of a
Borrowing consisting of an Agent Advance, or the issuance of Letters of Credit
hereunder.”
“ ‘Cash Flow’ means, for any period, an amount equal to: (a) the sum of:
(i) EBITDA (adding back Permitted Distributions and Closing Expenses, in each
case, to the extent they are included in determining EBITDA); and (ii) accrued
Turnaround Costs for such period relating to the Paramount Refinery, minus
(b) the sum of: (i) actual Turnaround Costs for such period;
(ii) Non-Discretionary Capital Expenditures made by the Borrower and its
Subsidiaries during such period; and (iii) federal, state, local and foreign
income Taxes paid or payable during such period by the Borrower and its
Subsidiaries to the extent included in EBITDA, provided that such Taxes shall in
no event be less than zero.
“ ‘Change of Control’ means if (a) Holdings ceases to own directly or indirectly
100% of the issued and outstanding voting capital stock of the Borrower, or
(b) Alon ceases to own directly or indirectly 100% of the issued and outstanding
voting capital stock of Holdings.”
“ ‘Maximum Revolver Amount’ means Two Hundred Fifteen Million Dollars
($215,000,000).”
“ ‘Security Agreement’ means that certain Security Agreement (as amended,
restated, or otherwise modified from time to time) dated as of December 18, 2003
by and between the Borrower and the Agent.”
“ ‘Stock Purchase Closing Date’ means the ‘Closing Date’ as defined under the
terms of the Stock Purchase Agreement.”
“ ‘Subordination Agreement’ means a subordination agreement entered into between
Agent, on behalf of the Lenders, and one or more third parties in form and
substance satisfactory to the Agent and the Lenders including, without
limitation, the Subordinated Term Loan Subordination Agreement.”
“ ‘Subordinated Debt’ means Debt issued by the Borrower and subordinated in all
respects to the payment and performance of the Obligations pursuant to a
Subordination Agreement including, without limitation, the Debt evidenced by the
Subordinated Term Loan Documents.”

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“ ‘Termination Date’ means the earliest to occur of: (i) the Stated Termination
Date; (ii) the date the Total Facility is terminated either by the Borrower
pursuant to Section 3.2 or by the Required Lenders pursuant to Section 9.2; and
(iii) the date this Agreement is otherwise terminated for any reason whatsoever
pursuant to the terms of this Agreement.”
     Section 2.7 Deleted Definitions. The following definitions contained in
Annex A are hereby deleted in their entirety: “Base Facility”; “Special
Availability”; “Special Revolving Lenders”; “Special Revolving Line of Credit”;
“Special Revolving Line of Credit Period”; “Special Revolving Line of Credit
Termination Date”; “Second Special Availability”; “Second Special Revolving
Lenders”; “Second Special Revolving Line of Credit”; “Second Special Revolving
Line of Credit Period”; “Second Special Revolving Line of Credit Termination
Date”; and “Second Special Revolving Loans”.
     Section 2.8 Schedules A-1 and A-3 of the Credit Agreement are hereby
amended and restated in full, respectively, by replacing them with Schedule A-1
and Schedule A-3 attached to this Amendment.
ARTICLE III
OTHER AGREEMENTS
     Section 3.1 Limited Waivers.
     (a) The Agent and the Lenders hereby waive any noncompliance with
Sections 7.9 and 9.1(p) of the Credit Agreement resulting from either (i) the
“Closing” (as defined in the Stock Purchase Agreement) or (ii) the transfer of
the stock of Paramount, OR and Paramount, WA, described in Section 3.4 of this
Amendment, solely in connection with the 1031 Transaction (as defined below).
     (b) The Borrower has advised the Agent and the Lenders that it will incur
certain fees and expenses for closing fees, investment banking fees, other
out-of-pocket expenses, and payments to existing employees (collectively, the
“Closing Expenses”) in connection with the closing of the Stock Purchase
Agreement in an aggregate amount not to exceed $34,000,000. The Agent and the
Lenders hereby waive any noncompliance with Sections 7.9, 7.15, or 7.16 of the
Credit Agreement with respect to the Closing Expenses so long as (i) the Closing
Expenses do not exceed $34,000,000 in the aggregate and (ii) the Closing
Expenses are paid substantially contemporaneous with the Stock Purchase Closing
Date.
     (c) The Agent and the Lenders hereby waive any noncompliance with
Sections 7.12, 7.13, 7.15, and 7.18 of the Credit Agreement resulting from the
execution and maintenance of the CS Guarantee and Collateral Agreement;
provided, that CS enters into the CS Intercreditor Agreement with the Agent on
terms and conditions mutually satisfactory to the Agent and CS.
     (d) The Agent and the Lenders hereby waive any noncompliance with
Section 7.10 of the Credit Agreement resulting from the Upper Bluffs Dividend
described in Section 3.5 of this Amendment.

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The waivers contained in this Section 3.1 are limited to the specific
transactions described in the foregoing clauses (a) through (d) and shall not
constitute a waiver of any other violation of Sections 7.9, 7.10, 7.12, 7.13,
7.15, 7.16¸ 7.18 or 9.1(p) of the Credit Agreement, whether or not similar to
the transactions evidenced by the Stock Purchase Agreement, the 1031
Transaction, the expenses and fees paid in connection with the Stock Purchase
Agreement, the CS Guarantee and Collateral Agreement, or the Upper Bluffs
Dividend.
     Section 3.2 Non-Recourse Guaranty Agreement and Stock Pledge. Concurrent
with the Stock Purchase Closing Date, (a) the Borrower shall cause Holdings
(i) to execute a Non-Recourse Guaranty Agreement in favor of the Agent and the
Lenders, (ii) to pledge to the Agent, for the benefit of the Lenders, 100% of
the issued and outstanding capital stock of the Borrower (the “Shares”) pursuant
to a Pledge Agreement executed by Holdings and the Agent in form and substance
reasonably satisfactory to Agent, (iii) to deliver the original stock
certificates representing the Shares to be immediately delivered to the Agent,
and (iv) to execute an Assignment Separate from Certificate in blank with
respect to the Shares, and (b) the Agent and the Lenders will release the
current Non-Recourse Suretyship Agreements and Pledge Agreements from each of W.
Scott Lovejoy, Mark R. Milano, and the Craig C. Barto and Gisele M. Barto Living
Trust, u/d/t dated April 5, 1991 (it being understood by all parties that each
of the Non-Recourse Suretyship Agreement and the Pledge Agreement executed by
the Jerrel C. and Janice D. Barto Living Trust, u/d/t dated March 18, 1991, have
been released in connection with the Third Amendment to Amended and Restated
Credit Agreement dated as of June 12, 2006).
     Section 3.3 1031 Exchange. Pursuant to Section 2.3(d) of the Stock Purchase
Agreement, the Borrower has requested that the Agent and the Lenders agree to
release their liens on the assets of Paramount, OR and Paramount, WA, all as
more fully described on Exhibit 1 attached hereto and by its reference
incorporated herein (collectively, the “1031 Assets”), contemporaneous with the
sale, if any, to Alon (or its qualified intermediary) of the 1031 Assets under
the terms of the Stock Purchase Agreement (the “1031 Transaction”). For
avoidance of doubt, the 1031 Assets do not include any Inventory or Accounts,
including any located at or associated with the Willbridge Refinery or the
Richmond Beach Terminal, all of which are owned by the Borrower and upon which
the Agent and the Lenders have a continuing lien. Under the terms of Section
2.3(d) of the Stock Purchase Agreement, contemporaneous with the 1031
Transaction, if any, the Agent and Lenders agree to release their liens on the
1031 Assets provided that:
     (a) No Default or Event of Default shall have occurred and be continuing;
     (b) The 1031 Exchange does not occur prior to three (3) Business Days prior
to the anticipated Stock Purchase Closing Date (the “1031 Effective Date”);
     (c) The purchase price for the 1031 Assets is not less than that specified
in Schedule 2.3(d) of the Stock Purchase Agreement; and
     (d) The Agent receives, for the benefit of the Lenders, in cash, the
purchase price set forth in Schedule 2.3(d) (as may be amended) of the Stock
Purchase Agreement

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after the Borrower’s payment of (i) all directly related out-of-pocket expenses,
such as escrow and title company fees and (ii) accrued but unpaid real estate
taxes on the 1031 Assets. The net amount of the purchase price, after
subtracting clauses (i) and (ii) of the preceding sentence shall be applied by
the Agent to the outstanding balance of the Loans in accordance with the terms
of the Credit Agreement.
Notwithstanding the foregoing, if the Stock Purchase Closing Date does not occur
on or before the time period set forth in Section 2.3(d)(iii) of the Stock
Purchase Agreement, the Borrower agrees to cause (i) the 1031 Transaction to be
unwound, (ii) the Subsidiary Guarantors to immediately grant to the Agent and
the Lenders liens in the 1031 Assets with the same priority as those existing in
favor of the Agent and the Lenders immediately prior to the Fifth Amendment
Closing Date, (iii) a new title policy in form and substance satisfactory to the
Agent to be issued in favor of the Agent and the Lenders insuring the title with
respect to the 1031 Assets, and (iv) the Subsidiary Guarantors to execute such
additional documents and instruments as the Agent may reasonably request to
carry out the terms of the foregoing.
     Section 3.4 Release of Paramount, WA and Paramount, OR. Following the 1031
Transaction and upon the satisfaction of the conditions precedent set forth in
Section 4.1 of this Amendment, the Agent and the Lenders shall release (a) their
liens on the stock owned by the Borrower of Paramount, OR and Paramount, WA and
(b) any Guaranty Agreement, Security Agreement, or other document executed by
Paramount, WA or Paramount, OR in favor of the Agent and/or the Lenders. In
connection with the 1031 Transaction, on or after the 1031 Effective Date, the
Borrower may transfer, by merger or otherwise, all of its ownership interest in
Paramount, WA and Paramount, OR.
     Section 3.5 Release of Point Wells Property. The Borrower has advised the
Agent and the Lenders that it intends to dividend or distribute to the owners of
the Borrower the real property owned by Point Wells above the Richmond Beach
Terminal commonly known as the Upper Bluffs Property (the “Upper Bluffs
Property”) by distributing the membership interests of the Borrower in Point
Wells and such dividends or distributions will occur substantially concurrent
with the Stock Purchase Closing Date (the “Upper Bluffs Dividend”). Concurrent
with such dividend or distribution, the Agent and the Lenders agree (x) to
release their liens on the Upper Bluffs Property and all other property of Point
Wells, (y) release the Guaranty Agreement and Security Agreement of Point Wells
executed in favor of the Agent and the Lenders, and (z) release the pledge by
the Borrower of the membership interests of the Borrower in Point Wells. If the
Stock Purchase Closing Date does not occur within three (3) Business Days
following such release of liens, the Borrower agrees to cause (i) Point Wells to
immediately grant to the Agent and the Lenders a lien in the Upper Bluffs
Property, and all other property of Point Wells, with the same priority as that
existing in favor of the Agent and the Lenders immediately prior to the Fifth
Amendment Closing Date, (ii) the membership interests of Point Wells to be
transferred back to the Borrower and repledged to the Agent and the Lenders with
the same priority as that existing in favor of the Agent and the Lenders
immediately prior to the Fifth Amendment Closing Date, (iii) a new title policy
in form and substance satisfactory to the Agent to be issued in favor of the
Agent and the Lenders insuring the title of the Upper Bluffs Property, and
(iv) Point Wells to execute such additional documents and instruments as the
Agent may reasonably request to carry out the terms of the foregoing.

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     Section 3.6 Repayment of the Term Loan Debt. Contemporaneous with the Stock
Purchase Closing Date, the Term Loan shall be repaid in full from the proceeds
of the Subordinated Term Loan.
     Section 3.7 Subordinated Debt. Unless the Borrower has previously made
Permitted Payments in respect of the Subordinated Debt since January 1, 2006 in
an aggregate amount of Four Million Dollars ($4,000,000) or more, the Borrower
shall be permitted to make aggregate payments substantially concurrent with the
Stock Purchase Closing Date to (a) the Jerrel C. and Janice D. Barto Living
Trust, u/t/d dated March 18, 1991, (b) the Craig C. Barto and Gisele M. Barto
Living Trust, u/t/d April 5, 1991, (c) W. Scott Lovejoy, and (d) Mark R. Milano
(collectively, the “Subordinated Owners”) equal to the difference between
(i) Four Million Dollars ($4,000,000) and the aggregate amount of any prior
Permitted Payments to the Subordinated Owners since January 1, 2006. This
consent is a one-time consent only, relates only the specific transaction
described above and is not a consent to any other payments on Subordinated Debt
except as expressly permitted in the Credit Agreement.
     Section 3.8 Pro Forma Financial Information. The Borrower covenants to the
Agent and the Lenders that the Financial Statements of the Borrower for the
calendar month ending immediately following the Stock Purchase Closing Date,
delivered in accordance with Section 5.2(b) of the Credit Agreement, will have
no material adverse difference from the changes noted in the pro forma financial
information of the Borrower (as of the Stock Purchase Closing Date and
reflecting the transactions in the Stock Purchase Agreement) previously
delivered in writing to the Agent, which is reasonably likely to result in a
Material Adverse Effect. A breach of the covenant set forth in this Section 3.8
shall constitute an Event of Default under the terms of the Credit Agreement
     Section 3.9 Further Assurances. The Borrower covenants to the Agent and the
Lenders that it will grant, or cause to be granted, to the Agent upon the
Agent’s request therefore a lien on any real property and assets owned by the
Borrower (and Paramount, Or and Paramount, WA solely to the extent that the 1031
Transaction doesn’t occur under Section 3.3 of this Amendment), to the extent
that such property becomes Term Collateral (as defined in the CS Intercreditor
Agreement) on or after the Fifth Amendment Closing Date (“After Pledged
Property”). The Borrower shall cooperate in delivering to the Agent any executed
documents, instruments, mortgages, deeds of trust, or similar security
agreements with respect to the After Pledged Property, each in form and
substance satisfactory to the Agent in its discretion, reasonably exercised.
     Section 3.10 Compliance with Credit Agreement. The Borrower hereby
represents and warrants to the Agent and the Lenders that (a) no Default or
Event of Default has occurred and is continuing, (b) the representations and
warranties contained herein and in the Credit Agreement, as amended hereby, are
true and correct in all material respects as of the date hereof as if made on
the date hereof, except for such representations and warranties limited by their
terms to a specific date, and (c) the Borrower is in compliance with all
covenants set forth herein and in the Credit Agreement, as amended hereby.

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ARTICLE IV
CONDITIONS PRECEDENT
     Section 4.1 Conditions Precedent. This Amendment will not be binding on the
Agent and the Lenders with respect to the 1031 Transaction until the 1031
Effective Date. The balance of this Amendment will not be binding on the Agent
and the Lenders until the satisfaction of the following conditions precedent in
form and substance satisfactory to the Agent, provided, that, in all cases,
Section 5.7 of this Amendment shall be immediately effective upon the full
execution of this Amendment:
     (a) The closing of the Stock Purchase Agreement shall have occurred in
accordance with Section 2.6 of the Stock Purchase Agreement (it being understood
however that the closing of the Stock Purchase Agreement, the waivers of Agent
and Lenders under Section 3.1 and the binding effect of this Amendment as
otherwise provided in the second sentence of Section 4.1 above shall all be
deemed to occur concurrently);
     (b) The representations and warranties contained herein and in the Credit
Agreement, as amended hereby, shall be true and correct in all material respects
as of the date hereof as if made on the date hereof, 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;
     (d) The Borrower shall have delivered to the Agent an executed original of
this Amendment together with all acknowledgements;
     (e) The Borrower shall have paid to the Agent and BAS all fees, costs, and
expenses owed to and/or incurred by the Agent or BAS, respectively, arising in
connection with this Amendment;
     (f) The Agent shall have received an executed promissory note from the
Borrower for each of the respective Lenders to reflect their Commitment;
     (g) The Agent shall have received an executed Fifth Amendment of Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing for the
property of the Borrower located in Paramount, California, together with such
endorsements to title policy number 31050058X52 as the Agent may require in its
discretion;
     (h) 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;
     (i) The Agent shall have received each of the following fully-executed
documents, in form and substance satisfactory to the Agent in its discretion,
reasonably

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exercised: (i) a Non-Recourse Guaranty Agreement executed by Holdings in favor
of the Agent, (ii) a Pledge Agreement by and between the Agent and Holdings;
(iii) an assignment separate from certificate executed in blank by Holdings; and
(iv) the stock certificate representing the Shares;
     (j) The Agent shall have received a fully-executed copy of the Stock
Purchase Agreement with all schedules and attachments thereto and the Agent
shall have received and approved Schedule 2.3(d) to the Stock Purchase
Agreement;
     (k) The Agent shall have received the final form of the CS Guarantee and
Collateral Agreement;
     (l) The Agent shall have received the final form of the Subordinated Term
Loan Documents;
     (m) The Agent shall have received satisfactory evidence that the Borrower
has received the Subordinated Term Loan and that the Borrower has repaid the
Term Loan Debt in full;
     (n) The Agent shall have received a fully executed copy of the CS
Intercreditor Agreement substantially in the form attached hereto as Exhibit 2;
     (o) The Agent shall have received a fully executed copy of the Subordinated
Term Loan Subordination Agreement, on terms and conditions satisfactory to the
Agent in its discretion, reasonably exercised;
     (p) The Agent shall have received a letter agreement with respect to the
Willbridge Refinery and the Richmond Beach Terminal, in each case, granting the
Agent access rights substantially similar to those granted to the Agent under
the terms of Section 5 of the CS Intercreditor Agreement;
     (q) The Borrower has Availability of not less than Twenty Million Dollars
($20,000,000) after (i) giving effect to the payment of all fees and expenses
incurred in connection with this Amendment, (ii) giving effect to the Closing
Expenses, (iii) giving effect to proceeds from the Subordinated Term Loan and
(iv) reserving against accounts payable aged beyond their customary payment
terms and any book overdraft;
     (r) There shall exist no action, suit, investigation, litigation, or
proceeding pending or threatened in any court or before any arbitrator or
governmental instrumentality that in the Agent’s judgment (a) could reasonably
be expected to have a Material Adverse Effect, or (b) could reasonably be
expected to materially and adversely affect the credit facility set forth in the
Credit Agreement or the transactions contemplated thereby;
     (s) The Agent shall have determined that the Borrower and its Subsidiaries
are adequately capitalized, that the fair saleable value of their assets will
exceed their

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liabilities at closing, and that the Borrower and its Subsidiaries will have
sufficient working capital to pay their debts as they become due;
     (t) To the extent that the transactions contemplated by the Stock Purchase
Agreement affect any existing insurance policies or certificates, the Agent
shall have received updated certificates of insurance and loss payable
endorsements, all in form and substance satisfactory to the Agent;
     (u) The Borrower, each Subsidiary Guarantor and Alon shall have obtained
all governmental and third party consents and approvals as may be necessary or
appropriate in connection with the Credit Agreement, this Amendment, the Stock
Purchase Agreement and the transactions contemplated thereby, including evidence
satisfactory to Banc of America Securities LLC (“BAS”), the Agent and their
respective counsel that the Borrower and Alon have obtained any necessary or
appropriate Hart Scott Rodino Act approvals;
     (v) 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 in its sole and absolute discretion.
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 neither the
consent of the Term Loan Lenders nor of the Term Loan Agent is required under
the terms of either the Amended and Restated Intercreditor Agreement or the Term
Loan Documents in order to consummate the transactions and amendments
contemplated by this Amendment. In the alternative, if any such consent by the
Term Loan Lenders or the Term Loan Agent is required, such consent has been
obtained and delivered to the Agent, in form and substance satisfactory to the
Agent, on or before the date of this Amendment.
     Section 5.2 Loan Documents Unmodified. Except as otherwise specifically
modified by this Amendment, all terms and provisions of the Credit Agreement and
all other Loan Documents, as modified hereby, shall remain in full force and
effect. A breach by Borrower of the terms of this Amendment shall be an Event of
Default. 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

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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 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 TO OR OF ANY BREACH OF OR DEVIATION FROM ANY COVENANT, DUTY, OR
CONDITION SET FORTH IN THE 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 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
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 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.
     Section 5.7 Expenses of Agent and BAS. 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 and BAS 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 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. In addition,

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the Borrower will pay (a) all reasonable out-of-pocket costs and expenses
(including legal fees of the Agent’s and BAS’ counsel) of the Agent and BAS
associated with the credit facility set forth in the Credit Agreement and this
Amendment, including costs and expenses of (i) the Agent’s and BAS’ due
diligence, including field examinations, appraisals and environmental audits,
and (ii) preparing, administering, syndicating and enforcing all documents
executed in connection with this Amendment and the Loan Documents executed in
connection herewith, plus (b) a $850 per day per field examiner charge, in
addition to all out-of-pocket expenses for field examinations.
     Section 5.8 Choice of Law; Jury Trial Waiver. TO THE EXTENT PERMITTED BY
LAW, 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. Without limiting the applicability of any other provision of the
Credit Agreement, the terms of Section 13.3 of the Credit Agreement shall apply
to this Amendment.
     Section 5.9 Total Agreement. This Amendment, the 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,         a Delaware corporation
   
 
           
 
  By: /s/ Craig H. Studwell
 
        Name: Craig H. Studwell         Title: Senior Vice President    

 

 

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                  “AGENT”    
 
                BANK OF AMERICA, N.A.    
 
           
 
  By: /s/ Todd R. Eggertsen
 
        Name: Todd R. Eggertsen         Title: Vice President    
 
           
 
  “BAS”      
 
                BANC OF AMERICA SECURITIES LLC, as         sole lead arranger
and book manager    
 
           
 
  By: /s/ Janet Jarrett
 
        Name: Janet Jarrett         Title: Principal    

 

 

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

 

 

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                  “LENDERS”    
 
                BANK OF AMERICA, N.A.    
 
           
 
  By: /s/ Todd R. Eggertsen
 
        Name: Todd R. Eggertsen         Title: Vice President    
 
                SOCIÉTÉ GÉNÉRALE    
 
           
 
  By: /s/ Peter Rihs
 
        Name: Peter Rihs         Title: Vice President    
 
           
 
  By:   /s/ Stephanie Placide
 
        Name: Stephanie Placide         Title: Director    
 
                CITIBANK (WEST), FSB    
 
           
 
  By: /s/ Hillary Savoie
 
        Name: Hillary Savoie         Title: Vice President    
 
           
 
  BNP PARIBAS    
 
           
 
  By: /s/ Jordan Nenoff
 
        Name: Jordan Nenoff         Title: Director    
 
           
 
  By: /s/ Keith Cox
 
        Name: Keith Cox         Title: Managing Director    

 

 

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                  NATEXIS BANQUES POPULAIRES    
 
           
 
  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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     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 affect 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/ 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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     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, 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. Each of the undersigned
hereby reaffirms its obligations under its respective Deed of Trust with Power
of Sale, Assignment of Leases and Rents, Security Agreement, Fixture Filing and
Financing Statement, but otherwise subject to the terms of this Amendment. 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
above described documents, of the persons listed below, including but not
limited to the person who fails to sign.

                  Paramount of Oregon, Inc., an Oregon         corporation    
 
           
 
  By: /s/ Craig H. Studwell
 
        Name: 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